BUSINESS BEFORE QUESTIONS

London Local Authorities Bill [ Lords]   (By Order)

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.
	 Bill to be read a Second time on Thursday 25 February.

ORAL ANSWERS TO QUESTIONS

NORTHERN IRELAND

The Secretary of State was asked-

Criminal Justice and Policing (Devolution)

Eddie McGrady: What assessment he has made of the outcomes of the recent talks at Hillsborough between the Northern Ireland political parties; and if he will make a statement.

Mark Harper: What recent progress has been made on the devolution of criminal justice and policing; and if he will make a statement.

Jeff Ennis: What recent progress has been made on the devolution of policing to the Northern Ireland Assembly.

Shaun Woodward: The Hillsborough talks established by my right. hon. Friend the Prime Minister and the Taoiseach last week have now continued for eight days. The British and Irish Governments helped to establish a basis and a pathway on which we believed it would be possible for the parties to reach a reasonable agreement. Considerable progress has been made. With good political will, we believe that the parties should soon be able to reach a reasonable agreement.

Eddie McGrady: I thank the Secretary of State for his response. May I place on record the thanks of the people of Northern Ireland to the Prime Minister, the Secretary of State, the Taoiseach and the Minister for Foreign Affairs for the extraordinary patience and diligence that they have applied throughout these talks? Does the Secretary of State share the frustration and anger of the people of Northern Ireland about the lack of real progress in these talks? Could he explain to the House why the Government have abandoned the core agreement principle of inclusivity by excluding 44 per cent. of the electorate from meaningful inter-party dialogue at these talks, and explain the abandonment of proportionality in the allocation of Ministries?

Shaun Woodward: I certainly share the sense of frustration; after eight days and 110 or 120 hours of talks, sleep deprivation might be having its effect, as well.
	The Prime Minister and the Taoiseach wanted to ensure that it was possible for the political parties to reach a reasonable agreement. Let us remember that, ultimately, because of the St. Andrews arrangements, the completion of devolution will be decided by a cross-community vote. However, before that, the political parties have been engaging in the past week in talks in an inclusive way. I can only say that, from what I have seen so far of the product of these talks, many of the points that the political parties in Northern Ireland would have wanted to see in such a process are very much under consideration.

Mark Harper: I am grateful to the Secretary of State for that answer and for clarifying the position for the House. I have been a little concerned in listening to at least one of the parties talking about whether any agreement that was reached among the parties to the talks would have in some way to be put out for public consultation or a vote-it is a bit unspecific. What is the Government's position on that? Do they think that that would be a helpful process or that it would hinder a solution that would be durable and remain for the foreseeable future?

Shaun Woodward: Clearly, whatever agreement is reached by the parties must be durable. It is very important for us all to understand that what is at stake are not simply arrangements for a date for the transfer of policing and justice powers, for which the Government strongly believe that the time is now right: this is the end of a political process that began with the peace process itself. If we succeed with this, we will secure all the achievements of the peace process; if we fail, we will put many of them at risk.

Jeff Ennis: I, too, congratulate my right hon. Friend, the Prime Minister and the Taoiseach, and all the other local and national politicians, on all the efforts that they have made in trying to progress this very important matter. I also congratulate my right hon. Friend on the new unit that he opened this week in Maghaberry prison. On that particular aspect, if the devolution of policing does not go ahead, what might be the implications for the future of the prison-building programme in Northern Ireland?

Shaun Woodward: I thank my hon. Friend for that question. In fact, my right hon. Friend the Minister, who is responsible for security and policing, had the pleasure of opening that unit. He was allowed out of our open prison to go to another one, but I am pleased to report that we brought him back pretty promptly.
	We are committed to the provision of new places in prison. In the past two years, we have provided some 300 new prison places, with 120 more to come. The House may wish to note, however, that if no agreement is reached in the next few days, and if therefore we cannot complete devolution, the loss of the £800 million that my right hon. Friend the Prime Minister would make available would almost certainly mean that extra prison places would not happen, that the new women's prison would not happen, and that, indeed, the new Magilligan prison would be unlikely to proceed.

William McCrea: Does not the Secretary of State think that an essential ingredient of the current discussions must be a consensus that can command community confidence? Without that community confidence, no matter what pressure is placed upon me or my colleagues, the Democratic Unionist party will not be buying into any deal. Progress has been made, but more remains to be done, and we certainly agree with including all the other parties in these discussions.

Shaun Woodward: Of course everyone must have confidence, but confidence does not belong to any one community. One of the principles is that an agreement must indeed command support from everyone in Northern Ireland, but we are speaking about something that was understood in the St. Andrews agreement and that people expected would be completed. All the political parties in the Assembly elections understood the importance of completing devolution. The Assembly has been up and running for nearly three years, and that business remains to be done. We believe that the confidence is there, and it is now time to summon leadership and courage and act.

Kate Hoey: Does the Secretary of State agree that it is very important that no party in Northern Ireland is seen to be blackmailing Her Majesty's Government? The actions of Sinn Fein, in threatening to pull down the Assembly if the Prime Minister and the Taoiseach did not go almost straight over to Northern Ireland and spend hours without sleep, would not seem to any reasonable person a sensible way forward. Of course we want the agreement to happen, but that is not necessarily the best way to move forward.

Shaun Woodward: I thank my hon. Friend for those remarks. Let us be clear that the Prime Minister works extremely hard whether he is here in Downing street or in Northern Ireland, which is why I am sure we are all very grateful to him for what he has done. He went to Northern Ireland with the Taoiseach because he has been following the matter very closely over the past few months and judged that the time was right last Monday to go and help facilitate the talks and to build a pathway on which it would be possible to construct a reasonable agreement. That was the critical role that he played in those two days. If we reach agreement, the people of Northern Ireland from every community should be grateful to him and to the Taoiseach.

Patrick Cormack: In thanking the Secretary of State and the Prime Minister for the time and effort that they have spent over the past few days, may I urge the Secretary of State to use whatever extra patience is necessary to ensure that when an agreement is reached, as I hope and trust it will be, it will hold and be supported throughout all the communities in Northern Ireland?

Shaun Woodward: I thank the hon. Gentleman for those remarks, and indeed for his help during those two days when his being in Northern Ireland with the Select Committee on Northern Ireland Affairs coincided with the Prime Minister and the Taoiseach being there. He is absolutely right that patience is required, but equally we must be careful not to try people's patience to distraction. Unfair failure to make progress would not be rewarded-not by any particular process now, but by the people of Northern Ireland. We have changed their lives through the peace process and secured peace in the political process. It is right to make progress, but we now sit on the edge.

Lady Hermon: For those of us who definitely do not want to go back to direct rule and who want devolution and the talks at Hillsborough to succeed, with the principles of tolerance and respect at their core, what more can we in this House do to encourage those in the negotiations to take them forward and make them successful, in the interests of everyone in Northern Ireland?

Shaun Woodward: I thank the hon. Lady for her contribution. She always speaks well on these issues, and indeed she always speaks well on behalf of her constituents. She is absolutely right to talk about the importance of tolerance and respect. It is essential that we also learn to put trust into the process. Every step of the way in the peace process has at times required us to make acts of faith. We need acts of faith and trust now, and whether one is a negotiator or standing outside the process, we all have a responsibility for its success. We would all have a responsibility were it not to succeed, although I hope that that will not happen.

Alistair Carmichael: May I, too, endorse the efforts of the Secretary of State and the Minister of State in recent days in relation to the talks? I endorse also what the Secretary of State says about the importance of trust and faith. Does he believe that he would have been able to engender that trust and faith and perform the role that he has if he had been caught out trying to construct a pan-Unionist alliance?

Shaun Woodward: The hon. Gentleman tempts me with the last part of his question. I will not make any attempt to secure any party advantage, because the politics of Northern Ireland are such that we must put the interests of the people above any party interest. However, I say this to the hon. Gentleman: we all have a responsibility. It is possible to grandstand what is happening in Northern Ireland, and in doing so, to say "It wasn't my fault" if it fails As I have said before, we are all responsible.

Owen Paterson: Everyone acknowledges the determination of the Secretary of State and his colleagues to see devolution completed, and we fully support his efforts and objectives. For devolution to be durable, it must command community confidence. Will he therefore ensure that both the Ulster Unionists and the Social Democratic and Labour party are fully involved in the negotiations as equal members of the four-party coalition?

Shaun Woodward: I wish to put on record that I believe that that can be done only if there is an unequivocal commitment to succeed by all parties in the House. I am grateful for what I believe is the hon. Gentleman's full support for what we are trying to negotiate, but let us be clear that the process at Hillsborough has been open to all parties. None the less, the agreement must be forged initially between the DUP and Sinn Fein. Let me pay tribute to the leadership offered by both parties. The process has been undertaken in a good spirit and in good faith, but it requires the support of those who may not be able to be involved in the intimate parts of every negotiation. I urge the hon. Gentleman to do all he can with his alliance partner in Northern Ireland to help that party understand that the talks must succeed.

Owen Paterson: The negotiations have been much more protracted than anyone anticipated. Like the Secretary of State, we want them to succeed, and I again assure him of our continued support. Can he confirm, however, that issues other than criminal justice, policing and parades that have been raised by the parties are being carefully considered as part of the final deal?

Shaun Woodward: These talks are to facilitate an agreement-the agreement must be reached by the political parties. I can confirm that in plenary sessions those issues have been raised and that a reasonable agreement would include a process to address them. However, it is sometimes difficult to address such issues if some Northern Ireland parties are not available for meetings or if they are not as prepared as other parties to meet me or my right hon. Friend the Minister.

Security Situation

Jeffrey M Donaldson: What his latest assessment is of the level of threat in Northern Ireland from dissident republican groups.

Henry Bellingham: What his latest assessment is of the security situation in Northern Ireland; and if he will make a statement.

Paul Goggins: The most recent Independent Monitoring Commission report confirmed that the threat from dissident republicans is at its highest for six years. I pay tribute to the work of the Police Service of Northern Ireland and the Security Service in combating and disrupting terrorism in all its forms.

Jeffrey M Donaldson: The Minister will be aware of the latest attempt by dissidents to carry out an attack on the security forces, which happened last night. Thankfully, it was thwarted through co-operation between the PSNI and the police in the Irish Republic. It is that kind of co-operation that will help to defeat those terrorists.
	Is the Minister aware of a realignment that is taking place within those dissident republican groups, as a result of which we have seen an increase in the number of attacks and the risks that they pose to the security forces? Will he reassure us that the Chief Constable will be given the resources he needs to combat that serious threat?

Paul Goggins: There was an attack last night on the Old Park barracks, which indeed followed an attack a few days ago at Bessbrook police station. Of course, all such incidents are to be condemned. The IMC noted that there was some tactical co-operation between certain groupings, which of course the PSNI and the Security Service are aware of and are dealing with, but the key thing is that the completion of devolution of policing and justice provides a real opportunity to snuff out those who would oppose the political and peace processes and try to bring disruption. We have a real opportunity to move such people right away from the mainstream of society, who support law and order and want visible policing on their streets to deal with everyday kinds of crime, including antisocial behaviour.

Henry Bellingham: Does the Minister share my concern about the sheer brutality and nerve of the recent drive-by shootings? Is he satisfied that the human intelligence-gathering capability of the PSNI is as good as it was in the RUC?

Paul Goggins: I have absolute confidence in the capacity of the PSNI and the Security Service to deal with the threat that is posed. It is a severe threat, and we recognise that, but the police and the Security Service have the capability to deal with it. I join the hon. Gentleman in condemning the people who carried out those attacks, and those who carried out the despicable attack on Constable Peadar Heffron a short time ago. I am pleased that because of Constable Heffron's great strength and the support of his family, he has now regained consciousness and is in a stable condition. Their approach to life stands in stark contrast to the despicable behaviour of those who tried to take his life.

Laurence Robertson: I join the Minister in condemning the attack on Constable Heffron and wish him a rapid and full recovery from his very serious injuries. His is one of a series of attacks, as we have heard this morning, mainly-although not exclusively-on police officers. On behalf of the Opposition, I condemn those attacks without reservation and I ask the Minister again whether he can do anything to help the police to protect their officers from these murderous and cowardly attacks.

Paul Goggins: I can reassure the hon. Gentleman that all police officers in Northern Ireland have received an appropriate briefing on their own security. This year the Government have made available an extra £28 million to deal with the terrorist threat, and more money will follow next year. It is a great tribute to the PSNI, when one looks back at some of the serious attacks in the past year, that two people have been remanded in custody and charged with murder in relation to the attacks at the Massereene barracks, two have been charged with the murder of Constable Stephen Carroll, and two have been charged with attempted murder in relation to an attack planned recently in Garrison against a young police officer. The police service is absolutely up for this and is determined to deal with the threat.

Decommissioning

Julie Kirkbride: What recent assessment he has made of progress on loyalist decommissioning.

Shaun Woodward: At the beginning of January, the Independent International Commission on Decommissioning confirmed a major act of decommissioning by the UDA. We applaud the leadership and courage behind that decision and those responsible.

Julie Kirkbride: The Secretary of State- [ Interruption. ]

Mr. Speaker: Order. These are important and serious matters we are discussing, but on both sides of the Chamber there are far too many private conversations taking place. If people want to have private chats, the answer is simple: leave the Chamber.

Julie Kirkbride: The Secretary of State rightly says that there has been welcome decommissioning by the UDA, but he will also be aware of the worrying number of loyalist dissident assaults, which are up by almost 250 per cent. on the same time last year. What is his Department doing to ensure that the people who orchestrate and authorise such assaults face justice?

Shaun Woodward: First, this is a matter for the Chief Constable. That being said, we are ensuring that the resources are available for him to deal with all those who are engaged in crime. If the agreement that we are trying to work through at Hillsborough succeeds, an additional £800 million will be available to policing and justice in Northern Ireland to help with these things. If the agreement is not reached, that money will not be available and the police will have to suffer the consequences of a failure to reach agreement.

Lindsay Hoyle: Along with others, my right hon. Friend has played a major part in the decommissioning talks. They have certainly brought safety to Northern Ireland, but does he believe that there is more to come from decommissioning, and has he any news that he can share with the House today?

Shaun Woodward: Let us reflect on the success of the decommissioning policy. We have seen full decommissioning from the Provisional IRA, the Ulster Volunteer Force and the Ulster Defence Association, and limited decommissioning is reported from the Loyalist Volunteer Force. It has been an extremely successful programme, but I should share with my hon. Friend the fact that next week, on 9 February, it comes to an end-the process will be over-and that will be that on decommissioning.

PSNI (Recruitment)

Andrew Turner: What his most recent estimate is of the level of recruitment to the Police Service of Northern Ireland of (a) Catholics and (b) Protestants; and if he will make a statement.

Paul Goggins: Since the introduction of the temporary recruitment provisions in 2001, there have been 3,751 appointments to the PSNI-1,888 Catholic, 1,831 Protestant and 32 not determined. Catholic composition within the PSNI has increased from 8.3 per cent. to 27.68 per cent. We remain on track to reach the target of 30 per cent. Catholic composition by March 2011, and today I am laying before Parliament an order that will renew the temporary provisions for a further final year.

Andrew Turner: What further measures will the Minister take to ensure that the required level of membership will be met from both denominations?

Paul Goggins: It was necessary to introduce the temporary provisions to deal with the historical imbalance in the representation in the PSNI. As I said, in 2001, 8 per cent. were Catholic, but now that figure is 27.68 per cent. As we move forward, however, it is important to ensure that, with confidence in policing shared across all communities, we can expect applications and people of high calibre from all communities and that they will be recruited. Of course we also need strategies to ensure that women apply to join the PSNI, and people from ethnic minorities too.

David Simpson: The Minister will be aware that over the past 12 months a number of PSNI and prison officers and former security force members have had to leave their homes following dissident republican threats. Does he agree that, if that continues, it will be a hindrance to encouraging young people to join the PSNI?

Paul Goggins: It is important, of course, that the Northern Ireland Office stands alongside the PSNI and provides support and protection where appropriate to police officers who may be under a serious and individual threat. However, as my right hon. Friend the Secretary of State said earlier, we all bear a responsibility to ensure that we create an environment in Northern Ireland in which those who seek to carry out the kinds of attack that we have seen are isolated from the mainstream community and stand unsupported and alone, so that they can have no further impact. All of us, including the hon. Gentleman and me, bear a responsibility.

Paramilitary Groups

Brian Binley: What recent assessment he has made of the level of activity by loyalist paramilitary groups in Northern Ireland; and if he will make a statement.

Shaun Woodward: Although I welcome the positive leadership that has delivered decommissioning in Northern Ireland, some individual members of loyalist paramilitary organisations remain involved in criminality, as reflected in the latest IMC report.

Brian Binley: In January, youth workers warned that social networking sites were being used by both Catholic and Protestant groups to foment violence. May I ask what steps the Government are taking to ensure that such sites are not so used?

Shaun Woodward: That is primarily a matter for the PSNI, which is looking at how such websites are used. Where there is illegal use of such sites or material, it will pursue the matter. However, I would simply say to the hon. Gentleman that the talks taking place right now in Northern Ireland will do more than anything to ensure that in the future young people find no interest in such activity. I ask him to urge his hon. Friends to do all they can to help the talks succeed.

Fuel Smuggling

Bill Wiggin: What recent assessment he has made of the level of fuel smuggling in Northern Ireland.

Paul Goggins: The latest assessment by Her Majesty's Revenue and Customs confirms that the amount of revenue lost through the non-payment of UK duty is reducing. We are not complacent, however, and in the past year HMRC has seized 1.09 million litres of illegal fuel.

Bill Wiggin: In 2002, the Chancellor's Budget targeted fuel smuggling, yet in a written answer on 14 November 2008, column WA150, the noble Lord Myners pointed out that £210 million in diesel revenue had not been collected, and that in 2005-06 it was also £210 million. Given the importance of fuel smuggling to terrorist organisations, why has there patently been no progress whatever since 2002?

Paul Goggins: The most important thing that we need to do is ensure that we find those who smuggle and deal in illegal fuel in Northern Ireland, seize their assets and bring them to justice. Under the remit of the Organised Crime Task Force, the PSNI and other law enforcement agencies are deeply involved with that. Operations now take place week after week to seize equipment and bring people to justice.

Stephen Pound: Further to that question-and indeed, to all the questions that have been asked today-does my right hon. Friend believe that conducting clandestine negotiations exclusively with Unionist politicians in a stately home in England helps or hinders the process?

Mr. Speaker: Order. I was listening intently to the hon. Gentleman. I was hoping that he would refer to fuel smuggling, and he did not.

Paul Goggins: Tempted, as I often am by my hon. Friend, to respond to the question that he asked, there is a serious point, and it is the one that my right hon. Friend the Secretary of State made previously. This is not a moment for party political advantage in this place; it is a moment for the parties of Northern Ireland, with our support, to strive for and find the agreement that can pave the way to permanent peace in Northern Ireland.

PRIME MINISTER

The Prime Minister was asked-

Engagements

David Evennett: If he will list his official engagements for Wednesday 3 February.

Gordon Brown: I am sure that the whole House will wish to join me in paying tribute to the service and sacrifice in Afghanistan of Lance Corporal Graham Shaw and Corporal Liam Riley, both from 3rd Battalion the Yorkshire Regiment, attached to 1st Battalion Coldstream Guards. We think of their families and their loved ones, and we will never forget the sacrifice that they have made and the service that they have given.
	This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be in contact with the Northern Ireland parties later today.

David Evennett: I add my sympathy and condolences to the families of those brave servicemen who have lost their lives in the service of our country.
	All our constituents are rightly concerned about transparency, expenses and cleaning up politics. With that in mind, now that it is clear that there was a £50,000 fund solely for the Prime Minister's use at his headquarters, will he explain why he did not declare this in the Register of Members' Financial Interests?

Gordon Brown: I know nothing about what the hon. Gentleman is talking about.

Jacqui Smith: Across the country, police officers and their community partners are working immensely hard to tackle violent crime. Who does my right hon. Friend think they should turn to, to monitor their success: to the Opposition, who have been caught bang to rights issuing dodgy crime statistics, or to the authoritative and independent British crime survey, which suggests that violent crime has fallen by 41 per cent. in the past 10 years?

Gordon Brown: I think that we all have a duty in the debate about law and order to give out all the facts that are relevant. To misrepresent facts that have come from the police and the British crime survey is not to allow us to have a fair debate in this country. The police have said that the use of the figure of 71 per cent. by the Opposition is "extremely misleading", while the BBC home affairs editor has said:
	"The story is of falling and then stable violence for over a decade."
	I think that there is a duty on everybody to report the facts accurately.

David Cameron: I join the Prime Minister in paying tribute to Corporal Liam Riley and Lance Corporal Graham Shaw, who were killed in Helmand on Monday. They were both very brave men. Everyone should be proud of their service and we should all honour their memory.
	Is it not becoming clear from the Chilcot inquiry that the Government in general, and the Prime Minister in particular, made a series of bad decisions that meant that our armed forces were not equipped properly when they were sent into harm's way?

Gordon Brown: I will welcome the opportunity to speak to the Chilcot inquiry, but the right hon. Gentleman must know that defence spending rose every year, with the fastest rises for 20 years, and that our forces in Iraq and Afghanistan received £14 billion from the contingency reserve to enable the fighting there to take place. Not only did we prepare the Army, Navy and Air Force with proper funding; we also funded every urgent operational requirement that was made. I do not believe that it is in the interests of this House to tell people that they were not properly equipped when funding was provided.

David Cameron: What the Prime Minister has just said is completely at odds with what witness after witness has said to the Chilcot inquiry. Let us listen to what they have said. The former Defence Secretary said that we now have fewer helicopters because of the decisions that the Prime Minister took as Chancellor. The former Chief of the Defence Staff, General Walker, said that
	"money ...was taken out of the helicopter budget".
	Soldier after soldier has complained about the lack of body armour, vehicles and equipment, and we now know that the service chiefs threatened to resign en masse. Is it not time that the Prime Minister admitted to the mistakes that he made when he was Chancellor?

Gordon Brown: First, the Conservatives do not even know what their policy is for 2010 on spending on anything. Secondly, I have always taken seriously the need properly to fund our defence forces. In the 2002 spending review, which is the subject of discussion here, the defence estimate was the best for 20 years. The Defence Secretary at the time said it was an excellent settlement that allowed us to modernise the forces. In 2004, the defence management board made its own decisions. Let me remind the right hon. Gentleman that he stood on a platform at the last election to cut defence spending by £1.5 billion.

David Cameron: As ever, this Prime Minister is in complete denial of the facts. He just said that he always took defence seriously. Another former Chief of the Defence Staff, General Guthrie, said that this Prime Minister
	"was the most unsympathetic Chancellor of the Exchequer, as far as defence was concerned". -
	-[ Official Report, House of Lords, 22 November 2007; Vol. 696, c. 961.]
	Just today, in front of the Chilcot inquiry, the former permanent secretary at the Ministry of Defence, Kevin Tebbit, said that while troops were in Iraq, and while that man was Chancellor of the Exchequer, his budget was subject to "arbitrary" cuts and a "guillotine." He said that he
	"was running...a crisis budget rather than one with sufficient resources".
	Is not the evidence mounting that the Prime Minister ignored the welfare of our armed forces right up until the moment it became politically convenient to do otherwise?

Gordon Brown: I repeat: the Conservative party went into the last election wanting to cut defence expenditure by £1.5 billion. We continued to increase the defence budget every year and we made every urgent operational requirement that was necessary for Her Majesty's forces in Iraq and Afghanistan. That has included £14 billion of extra expenditure from the reserve. Expenditure on Afghanistan was £600 million a few years ago. It will be £3.5 billion this year. Defence expenditure is rising this year, as it is rising in the next financial year. The right hon. Gentleman cannot portray a picture of defence cuts when defence expenditure has been rising. The only Government who cut defence expenditure recently were the last Conservative Government, who cut it by nearly 30 per cent.

Mr. Speaker: I call Jamie Reed.  [Interruption.] Order. I am sure Government Back Benchers want to hear Mr. Reed.

Jamie Reed: It is true. Thank you, Mr. Speaker. My right hon. Friend the Prime Minister will be aware that he is the only leader of any political party to support nuclear new build in this country. What certainty can he give my constituents, businesses and the supply chain in my constituency that we will make the necessary changes to the planning system to enable them to invest with confidence and certainty?

Gordon Brown: I hope that there is all-party support for the nuclear expenditure that is necessary to give us security in our power. It is 8 minutes past 12 and I understand that the current Conservative party policy is that nuclear power is a last resort. That is not the basis on which one can plan for the future. The Conservatives can change their policies every day. We will remain consistent in support for the energy needs of our country.

Nicholas Clegg: I would like to add my own expressions of sympathy and condolence to the families and friends of Corporal Liam Riley and Lance Corporal Graham Shaw from 3rd Battalion the Yorkshire Regiment, who tragically lost their lives serving so bravely in Afghanistan this week.
	I would like to return to the issue of defence spending. The Government are about to make a statement on the future defence needs of this country, yet the Prime Minister has already excluded the Trident nuclear missile system from the strategic defence review. How can that review be taken seriously if the most expensive weapons system that we have is to be excluded from it?

Gordon Brown: One can either take a unilateralist or a multilateralist attitude to defence. We take a multilateralist attitude that we are prepared to work with other countries for nuclear disarmament. We do so on the basis of being prepared to discuss the future of Trident as part of multilateral talks. We are prepared to look at and discuss the scientific evidence for reducing the number of submarines from four to three. The defence review paper will state all these things. I hope that the right hon. Gentleman will agree that in a very unsafe and insecure world where countries are acquiring nuclear weapons, breaching the non-proliferation treaty, it is better for us to be part of multilateral discussions to reduce nuclear weapons around the world.

Nicholas Clegg: Look at what we have: we have troops in battle without proper equipment and guillotined defence budgets in a world that has changed out of all recognition since the cold war, yet the Prime Minister and the Leader of the Opposition want to spend billions of pounds of taxpayers' money replacing and renewing a nuclear missile system designed to flatten Moscow at the touch of a button. How are we to face the threats the country faces if Government thinking is so stuck in the past?

Gordon Brown: I give the right hon. Gentleman credit for being consistent in his policies-something that I cannot say about the Opposition. It is important for us to maintain the resources we are spending in Afghanistan and it is important to understand in our strategic defence review that we are dealing with the problem of global terrorism, which is quite different from what we have experienced before. I assure the right hon. Gentleman that we will look carefully at all the uses of equipment for the future. It is important to recognise that we want to be part of multilateral discussions for the future.
	I add that it is not fair to our troops in Afghanistan to give the impression that they are not properly equipped for the job they are doing. We have spent £3.5 billion from the reserve this year and it will be even more next year. The average expenditure per member of our forces is nearly £0.5 million to ensure that they are properly equipped. More helicopters have gone into Afghanistan over the last few months, as have more vehicles. Special attention is being given to counter-terrorism and dealing with the threat of improvised explosive devices. It is completely wrong to say that our troops are not properly equipped. We are proud of them; they are professional; and they are properly equipped for the job they are doing.

Mark Lazarowicz: Before Christmas, the Government confirmed in the pre-Budget review that funding for front-line schools, hospitals and police would be protected and increased in real terms. Neither the Tory Opposition here nor the SNP Government in Scotland have given a similar pledge. Meanwhile, in my constituency, schools are facing savage budget cuts at the hands of a Lib-Dem-led council. Does this not show that only Labour can be trusted to protect front-line services?

Gordon Brown: The Scottish Administration have had a record increase in public expenditure as a result of the previous public expenditure review. It is sad that they have not made a priority of education for the young people of Scotland. They will pay a price for that failure at the ballot box. Some of the cuts having to be announced by the Scottish Administration are the result of the wrong and misleading decisions that they have made.

David Cameron: Thirteen years into government and 90 days before a general election, can the Prime Minister tell us what first attracted him to changing the voting system?

Gordon Brown: No one on the Opposition Benches seems to understand that the politics of the last year has changed for ever the way the public view the House of Commons and our parliamentary institutions or that the status quo cannot last and has to be changed. If the Conservatives want to defend the hereditary principle in the House of Lords, if they want to postpone reform of the House of Lords for more than 10 years and if they want to refuse the people a referendum on the alternative vote, they are making a mistake about what the British people are thinking. My message today is to the British people: we are prepared to change our constitution-and to change it for the better. We are for the alternative vote; the Opposition are for the hereditary vote.

David Cameron: It is back to the bunker time with that line. I do not know whether the Prime Minister pulled the secretary out of the chair before he typed that one, but it was a lot of old rubbish. The Prime Minister talks about the hereditary principle, but there is only one leader in this House who inherited his title. What a lot of rubbish!  [Interruption.] It is good of the Chancellor to have a laugh.
	The reason why the Prime Minister is in favour of the alternative vote is that it is election time. This is the man who ducked the leadership election and bottled the general election, and now he is trying to fiddle with the electoral system. He must think that the whole country is stupid. Have another go! Why are you doing it?

Gordon Brown: This is the man who, at Christmas, promised us a policy-a-day blitz to show us the substance of the Conservative party if it were in government. We have had confusion over the married couples allowance, we have had chaos over public spending, we have had exaggerations about crime, and we have had the Conservatives retreating on the hereditary principle and now supporting it for the House of Lords. This is a Conservative party that is in a complete muddle and has no manifesto. The Conservatives do not have the substance to be able to govern the country. They are a shambles.

David Cameron: Why do we not go over some of the history? The last Liberal leader who got suckered into this was, of course, Paddy Ashdown. He wrote this in his diary about Tony Blair:
	"Time after time after time, he'd say 'Yeah Paddy, I agree, but I can't get it past Gordon.'"
	He went on to say:
	"Gordon was the "primary block."
	Does not real improvement mean cutting the size of the House of Commons, cutting Ministers' pay, and complete transparency on expenses, but is not the one thing that we should not change the ability, at a general election in Britain, to get rid of a tired, incompetent, useless and divided Government?

Gordon Brown: There would be no change under the Conservatives; no change at all. The right hon. Gentleman is supporting the hereditary principle in the House of Lords. He is supporting the- [Interruption.]

Mr. Speaker: Order. I apologise for interrupting the Prime Minister, but we must have some quiet. I want to hear the answer, and I hope that others want to hear the answer as well.

Gordon Brown: The right hon. Gentleman's answer is about no change. It is the politics of no change at all. He supports the hereditary principle in the House of Lords. He supports no reform of the House of Lords for a decade. He supports no referendum to allow the electorate to have a chance. This is a party that has fundamentally not changed at all. The Conservatives are the same as they always were. We will vote for the alternative vote; they are still voting for the hereditary vote.

Stuart Bell: In the context of the Prime Minister's response to the parliamentary institution, is he aware that tomorrow Sir Thomas Legg will publish his full review of MPs' allowances? Building on the creation of the Independent Parliamentary Standards Authority and the Kelly recommendations-all of them the initiatives of the Prime Minister-can we put the sad and sorry saga of MPs' expenses behind us, and rebuild this institution called the House of Commons?

Gordon Brown: My hon. Friend is absolutely right. We must reform the system of expenses, and we must follow through with the Kelly and, now, the Kennedy reforms under IPSA. But I have to tell the House that we must do more than that. If I have a message for the whole country it is that it is not enough simply to change the expenses system; we must change the way in which we govern ourselves in this House of Commons and in the House of Lords.
	I come back to the essential questions. If the Conservatives are not prepared to face up to major change in the constitution, the public will see that the Conservative party has not changed one bit.

Edward Garnier: If what the Prime Minister told us a moment ago about defence spending was correct, why on earth did defence chiefs threaten to resign because of his proposed defence cuts, as General Walker told Chilcot this week?

Gordon Brown: I have to report to the House that defence spending was rising every year during that period. It was rising in real terms, and no one has doubted that every aspect of Iraq and Afghanistan was funded. I repeat that it was the Conservative party that went into the last election wanting to cut defence expenditure.

Robert Flello: I am sure that Members throughout the House will applaud the care and support given by the Royal British Legion to those who are serving and have served in our armed forces. The Royal British Legion is asking Members of Parliament and those wishing to be elected to the House to do our bit and keep the faith with our brave heroes. May I invite my right hon. Friend to sign the Royal British Legion pledge in support of our armed forces family?

Gordon Brown: I would be delighted to, and the Defence Secretary has already done so. I pay tribute to the outstanding work of the Royal British Legion and welcome its continued support to our armed forces and veterans. The Government support our service personnel and their families, and our services Command Paper was an attempt to show how we do so right across the services. The Green Paper published today by the Secretary of State for Defence reiterates our commitment to doing this.

John Hemming: At the weekend, National Express Group cancelled without consultation the No. 41 bus in Birmingham, causing major problems to people in the city. This is symptomatic of a national problem. When will the rest of the country be allowed to use the same system for bus management as is used in London?

Gordon Brown: I am sure I should call an emergency Cabinet meeting to look into the situation involving the No. 41 bus. I shall look into what the hon. Gentleman has said, and write to him.

Ian Davidson: Does the Prime Minister agree that anyone who wishes to be taken seriously on defence has got to be prepared to commit, unequivocally and without reservations, to the aircraft carriers? Does he also agree that there is a party difference here, in that the aircraft carriers and the Royal Navy are safe with Labour, but they would be sunk with the Conservatives?

Gordon Brown: There is no stronger defender of the case for the aircraft carriers than the Member for the constituency in which some of them are to be built. We are committed to the aircraft carriers. The future policy of the Navy is being organised around them, and I hope all parties will support the aircraft carriers.

John Hayes: All Governments make mistakes, and all Prime Ministers have regrets. Which of the following does the Prime Minister regret most: (a) the collapse in adult learning, with 1.4 million places lost; (b) the fact that the latest figures show that fewer young people are starting apprenticeships; or (c) the growing gulf between the number of university applications and the number of places? For the brevity you seek, Mr. Speaker, as well as for clarity for the House and the convenience of the Prime Minister, perhaps he can restrict his answer to saying just (a), (b) or (c).

Gordon Brown: What I regret most is the Conservatives' failure to support us as we were trying to take this country through recession with more apprenticeships, more people going to university and college, and every school leaver guaranteed the chance of a job or training. All these things were resisted by the Conservative party.

David Borrow: Does my right hon. Friend agree that investing in apprenticeships is an important way of investing in recovery? Does he therefore share my despair at the action of Tory South Ribble borough council in abandoning its apprenticeships scheme, and will he urge it to reconsider that and thereby show for once that the Tories are interested in young people and their futures?

Gordon Brown: It is difficult to know what the Tory party policy is on anything at the moment, and such is the lack of clarity that certainly for 2010 I could not guarantee that any apprenticeships that my hon. Friend wishes to support would be supported by the Tory party. We have trebled the number of apprenticeships; there are 250,000 of them now. We want to give every young person the chance to get an apprenticeship, if they have the qualifications to do so. Throughout the recession, we have been trying to maintain apprenticeships so that young people have the qualifications for the jobs of the future. There is only one party opposing that and opposing the expenditure on education, training and employment, and that is the Conservative party.

Crispin Blunt: All those involved in the 1998 defence review know that the Prime Minister's only interest was to get a £1 billion cut from the Conservative expenditure plans, which was reduced to £500 million a year only by the intervention of the Chief of the Defence Staff. Why is it that the Prime Minister is inviting us to believe that all the distinguished servicemen and civil servants who have given evidence to Chilcot on the chaos surrounding the financing and provision of equipment in the run-up to Iraq are wrong, and he is right?

Gordon Brown: The figures show that defence expenditure was rising every year in real terms, and that they were the biggest rises for 20 years. The figures also show that every single urgent operational requirement that the Ministry of Defence asked of us for Iraq and Afghanistan has been met. I am afraid it is the Opposition who are having difficulty with figures at the moment.

Clive Efford: My right hon. Friend has come under severe attack for not cutting the deficit fast enough or hard enough, but those who made those calls in this House seem to agree with him now. Does he think that that is what is meant by the statement that it is "a year for change" on the airbrushed Conservative poster?

Gordon Brown: It is a year for the Conservatives changing their mind every week about every single policy that they put forward. Two weeks ago, the Leader of the Opposition said that it would be "moral cowardice" not to tear up the Budget for 2010. The shadow Business Secretary then said that there would be "calamitous consequences" if that were to happen. Now the shadow Chief Secretary to the Treasury is boasting that he does
	"not have a detailed plan".
	In other words, not only do the people not know where the Conservative party stands, but the Conservative party does not know where it stands.

Lembit �pik: Thanks to the assistance of Finance Wales, the staff of the Secretary of State for Business, Innovation and Skills and the Royal Bank of Scotland, we have secured up to 100 new jobs at Regal Fayre in Montgomery. However, those are more than outweighed by 180 potential redundancies in Shop Direct's Newtown call centre. Could the Prime Minister arrange a meeting with the relevant Minister, once I have met Shop Direct's senior management tomorrow morning, to discuss this possible closure, which could cause a localised new recession in Montgomeryshire?

Gordon Brown: I understand the concern when any jobs are lost; it is a personal tragedy for those people who have, in many cases, given their lives to one company, which is unable to continue to employ them. I shall arrange for these meetings that the hon. Gentleman asks for to take place. I can assure him that every teenager who has been unemployed for six months now has the guarantee that they will get work or training, and that the services available to those who are unemployed are better than they have ever been. The result of that is that 300,000 people are leaving the unemployment register every month, and that employment is at a higher level and unemployment a lower level than people expected months ago.

Andrew Miller: Even though the claimant count is 48 per cent. down in my constituency, it is nevertheless a great disappointment to hear of Bowater going into administration. Will my right hon. Friend do what he can to ensure that the parent company's actions are investigated-it seems to be playing fast and loose with the British work force-and that the work force affected and the supply chain are given every possible support?

Gordon Brown: I know that the regional development agency stands ready to help my hon. Friend's constituents and the company that is in difficulty. This is clearly a difficult time for the work force. The administrators have said that in this case they will keep the business trading while they explore all options, which include looking for a buyer for the business. I can assure him that all the local agencies, including the rapid response teams at the jobcentre, will be available to help those workers in his constituency who are affected.

Paul Beresford: I am sure that the Prime Minister is aware that in percentage terms the population of the United Kingdom and Ireland is the greatest reservoir of the prion that causes the fatal and incurable human brain disease variant vCJD. One of the means of transmission is blood transfusion. Last October, the Government's scientific committee that is examining this issue recommended the use of a filter for blood for transfusion for children initially. When are the Government going to react to that recommendation?

Gordon Brown: The hon. Gentleman raises a very serious matter in great detail. That recommendation is obviously very important for the future of the blood transfusion service. I shall look at it very carefully and get back to him.

Tony Lloyd: Can the Prime Minister confirm that inheritance tax cuts of £200,000 for the richest 3,000 families could be achieved only at the expense of spending on schools and hospitals throughout the nation? If he rejects that policy, can he guarantee that there will be no Cameronian wobble on this side of the House?

Gordon Brown: The one thing that the Conservatives have stuck to through this month of muddle and division is their policy on inheritance tax. Like their policy on hereditary peers, it will give the richest people in our society the greatest amount of additional wealth. That could be at the expense of schools, it could be at the expense of the health service and it could also be at the expense of defence. I think people should know that the Conservative party's first priority, above all others, is to reduce inheritance tax for those who are perfectly able to take care of themselves. We are for the many, they are for the few.

Graham Stuart: Health funding is skewed towards younger, urban, Labour-voting areas, rather than towards older, rural areas such as my constituency. That is why Hull receives more than £1,800 per head whereas East Riding receives just £1,200 per head. The Prime Minister knows that age, not deprivation, is the key driver of health need, so why does he put the electoral interests of the Labour party ahead of the needs of the sick?

Gordon Brown: I have to say to the hon. Gentleman that the evidence is that in his region there are 12 new hospitals and 37,000 more NHS staff. We have doubled expenditure on the national health service so that everyone in our country will benefit and we are giving personal guarantees to every citizen of this country that they will receive cancer treatment within two weeks, that they will be in a position to get an operation within 18 weeks, that they will get regular check-ups and, at the same time, that they will be able to see a doctor at weekends or in the evening. The party that has resisted giving rights to every citizen is the Conservative party.

Brian Jenkins: My right hon. Friend is only too aware that we have, regrettably, too many war widows, to whom this country owes a great deal. Will he promise, in any Administration that he runs, to stop any suggestion to make those people relatively worse off, via the tax system, because they are not married?

Gordon Brown: There should be no discrimination against widows and no discrimination against those who have been abandoned by their partners. That is why we have a system of individual taxation and special allowances for widows. I would hesitate to say that the proposal for a married couple's or married man's allowance would be fair to widows or to people who had been abandoned by their partners.

Mark Prisk: Last year, Lord Mandelson launched a £1 billion strategic investment fund. It was designed to help industries across the country. I know that the Prime Minister struggled when asked about £50,000 earlier, but let me try him with this number: why is it that 90 per cent. of that fund does not help industry across the country but has been given to Labour constituencies?

Gordon Brown: The purpose of all our measures in the recession is to help industry and business out of recession. Some 300,000 businesses have been helped in all constituencies across the country. The difference between us is that the Conservatives opposed all our measures and we took the action to get us out of recession. We are taking action to keep us out of recession, while the Conservatives do not have a clue what they would do in 2010.

Alan Whitehead: Does the Prime Minister welcome the proposals announced last week for licensing and planning concerning houses in multiple occupation? Will he urge local authorities with a high concentration of HMOs, such as Southampton, to make early use of the powers that they will gain?

Gordon Brown: I know my hon. Friend has taken this issue up on many occasions and that it is an important issue when dealing with cities such as Southampton, where there are houses in multiple occupation. I can assure him that we will be urging councils such as those in his area to take up these proposals with speed.

Strategic Defence Review (Green Paper)

Bob Ainsworth: Today I am publishing a defence Green Paper that paves the way for a strategic defence review, set in the context of the national security strategy, early in the next Parliament. At the present time, Afghanistan is the main effort for the Ministry of Defence. Where choices have to be made, Afghanistan will continue to be given priority. Our forces there are fighting hard, protecting our national security by preventing Afghanistan from once again becoming a safe haven for terrorists.
	Two hundred and fifty three British service personnel have been killed in Afghanistan since 2001. Many more have suffered life-changing injuries. Their bravery in the face of a ruthless enemy has been a stark reminder to us that all conflict is difficult and dangerous. We certainly cannot assume that the conflicts of tomorrow will replicate those of today, but we must anticipate a wide range of threats and plan for the requirements necessary to counter them.
	We have come a long way since the last major defence review in 1998, which gave us the platform to modernise our armed forces. Looking forward, we will need to make decisions about the role that we want the United Kingdom to play in the world and about the capabilities that our armed forces need to support that role. We will need to balance those considerations against financial implications in what will inevitably be a resource-constrained environment. The Green Paper does not attempt to answer those fundamental questions. Instead, it is intended to set out our emerging thinking on the future security environment and on other key issues facing defence ahead of the review.
	Although there is no external direct threat to the territorial integrity of the UK, there are a wide range of emerging threats for which we must be prepared. We can work to diminish the threat of international terrorism and to counter the proliferation of chemical, biological and nuclear weapons; we can work to prevent emerging threats-for example, by improving our approach to cybersecurity-and to contain and resolve the threat from failing states; and we can work to ensure that the impacts of climate change and resource competition are managed peacefully, but my judgment is that conflict and instability in this new age will be an ever-present risk. In the face of those threats, no nation can hope to protect all aspects of national security by acting alone. We cannot simply defend from the goal line, and our defence posture must reflect that.
	In the coming decades, our armed forces must be prepared, if called upon to do so, to protect our interests, often in distant places and, most likely, as part of a coalition of international forces. The Green Paper therefore reaches two key conclusions. First, that defence must accelerate the process of reform and be able to change swiftly to address new and unforeseen challenges as they emerge. We need to be more adaptable in how we structure, equip, train and generate our armed forces. We need a more agile defence organisation, and we need more responsive strategic planning. Today, I am proposing that we should legislate for regular defence reviews to ensure that the armed forces continue to adapt rapidly to changing trends and threats.
	The second conclusion is that defence must improve its ability to work in partnership with our key allies and security institutions to make the most of our combined resources. Our alliances and partnerships will become increasingly important and will define how successful we will be in meeting the challenges that we face. We will strengthen our alliance with the United States if we strengthen our position in Europe. We will continue to press our European allies to contribute more to our collective defence effort, but, make no mistake, this is not about Europe taking precedence over the US, or vice versa-the two are mutually reinforcing relationships.
	In the UK, we need to improve further our partnerships with key Whitehall Departments and others to ensure that the contribution of our armed forces is joined up with our diplomatic and development efforts. In addition to its conclusions on adaptability and partnership, the paper poses six key strategic questions that the review will need to address. They are as follows. Where should we set the balance between focusing on our territory and region and on engaging threats at distance? How far are future conflicts likely to share the characteristics of our engagement in Afghanistan, and what approach should we therefore take if we employ armed force to address threats at distance? What contribution should our armed forces make to ensuring security and contributing to resilience within the UK? How could we more effectively employ armed force in support of wider efforts to prevent conflict and to strengthen international stability? Do our current international defence and security relationships require rebalancing in the longer term? Should we further integrate our forces with those of our key allies and partners?
	Although the defence budget has grown by over 10 per cent. in real terms since 1998-and not a penny will be cut from next year's budget-the forward defence programme faces real financial pressure. We will need to rebalance what we do in order to meet our priorities. In December, I began that process. I made a series of decisions to ensure that we found extra resources for vital equipment for Afghanistan. This included 22 new Chinook helicopters, which will provide necessary strategic lift capability for Afghanistan and for other military operations in the years ahead. However, our commitment to reducing the deficit resulting from the global financial crisis means that future resources across government will be constrained.
	The report of Bernard Gray into defence acquisition set out clearly the pressures facing the defence budget. It also set out the importance of improving our procurement processes and addressing the shortfalls in our acquisition systems. The strategy for acquisition reform published alongside today's Green Paper sets out how we will tackle the challenges facing this major area of defence expenditure. The major reform that it proposes will deliver enduring change by introducing greater transparency. It will ensure that our equipment plans are efficient, strategically focused, affordable and achievable.
	But it is not just in equipment acquisition that we will need to do better. We are aiming to deliver efficiency savings of more than £3 billion over the current spending review period. We have a strong programme of work to achieve this, including an independent review into the use of civilians in defence that is being led by Gerry Grimstone.
	Our biggest capability is our people. We rely on the ability of people, both military and civilian, to deliver defence. We need to attract the best people-people who are highly motivated and highly skilled. Our people have already shown their capacity to adapt to new challenges. We must continue to ensure that the structures and training that support them are fit for purpose, and that includes continuing to strengthen joint approaches across the services.
	There has been a great deal of interest in, and speculation about, whether any major capabilities will be confirmed in the Green Paper, but that is to misunderstand the purpose. I can say that we do not plan to revisit the conclusions of the 2006 White Paper on the nuclear deterrent. We have committed to a wide range of major capability improvements over the past few years including, most recently, signing contracts for two new aircraft carriers. [Hon. Members: Hear, hear!] Only two.
	Recent operations in Iraq and Afghanistan have demonstrated the importance of being able to deploy and sustain significant numbers of highly trained and equipped troops in a variety of roles, including providing the aviation and air support that they need. Unless the defence review takes a very radical new direction, it is the Government's position that those capabilities are likely to remain critical elements of our force structure. However, we need to know first what roles and missions we will expect our forces to undertake in the future before we can take final decisions about the capabilities that they will need. These will be key issues for the defence review.
	Let us be clear-change is needed, and there will be some tough and important decisions ahead. In my view, we must, as far possible, put aside our special interests, in politics, industry and the services, to take rational decisions that benefit defence and the security of our nation.
	In preparing the Green Paper, I consulted widely with academia, across government and with the main Opposition parties, and I am grateful for the help that I received. I would like to thank in this House the right hon. and learned Member for North-East Fife (Sir Menzies Campbell) and the hon. Member for Mid-Sussex (Mr. Soames), and Lord Robertson of Port Ellen in the other place, all of whom sat on my Defence Advisory Forum. Where the defence of the nation is concerned, we must seek as far as possible to reach consensus on the main issues.
	I hope that the Green Paper that I am publishing today helps that process and leads to a mature and well-informed debate about the future structure of our armed forces.

Liam Fox: I thank the Secretary of State for his statement and for prior sight of it, although we seem to be the last to have seen the Green Paper, since every journalist I have met this week has been telling me about its contents. The Secretary of State deserves genuine praise for his attempts to find a cross-party consensus. When the history of this dreadful Government is written, his will be one of the more honourable mentions.
	I thank my hon. Friend the Member for Mid-Sussex (Mr. Soames) for the effort that he put into producing a balanced and open-minded Green Paper. I know that his experience in the Ministry of Defence was very much appreciated in the process.
	The Green Paper indicates that the Ministry of Defence is coming out of denial, but that the Prime Minister is not. We are used to the Prime Minister briefing against his perceived enemies in the corridors of Westminster, but not normally undermining a Secretary of State on the front page of  The Times. How far away from the No. 10 briefing this week is paragraph 9 on page 9 of the Green Paper, which states:
	We cannot proceed with all the activities and programmes we currently aspire to, while simultaneously supporting our current operations and investing in the new capabilities we need. We will need to make tough decisions?
	Of course, this week we have seen the truth of the current Prime Minister's approach to defence. The former Defence Secretary, the right hon. Member for Ashfield (Mr. Hoon) has said that there was a strong feeling that the last defence review was not fully funded. The former Chief of the Defence Staff, Lord Walker, told us that the defence chiefs threatened to resign as a result of the savage cuts that the then Chancellor tried to apply to defence in the middle of two wars. Today the former permanent secretary, Sir Kevin Tebbit, talked about having to operate a permanent crisis budget.
	The Defence Secretary introduced defence cuts in December, but the Prime Minister this week was talking about increasing the defence budget. In his statement the Secretary of State said, There has been a great deal of interest in, and speculation about, whether any major capabilities will be confirmed in the Green Paper. We all know why. It is because No. 10 has been briefing all week that any project that has any job implications for the Prime Minister's constituency will be spared in any defence review. That is taking a core strategy way too far.
	There are some things on which we are clearly agreed. We know from bitter historical experience the difficulty of predicting future conflict-either its nature or its location. We cannot base our future security on the assumption that future wars will be like the current ones. That is why we must maintain generic capability and be able to adapt to any changing threats.
	There is no doubt that in Afghanistan we have been too slow to give the Army, in particular, the agility and flexibility that it needs to maximise its effectiveness. But we must also remember that we are a maritime nation dependent on the sea lanes for 92 per cent. of our trade. A time when the threat of disruption is increasing is no time for Britain to become sea blind.
	We agree that France and the United States are likely to be our main strategic partners. For us there are two tests: do they invest in defence, and do they fight? Sadly, too few European allies pass both these tests.
	The Secretary of State talked about a 10 per cent. increase in the defence budget in real terms. He also talks in the Green Paper about the higher level of defence inflation. Can he tell us how much of the increase in the defence budget has gone into pay, allowances and pensions, and what proportion of the increase has been available for equipment and other programmes over the period that he outlined? Can he confirm that the Department's budget for next year will be £36.89 billion, as previously set out? He says that not a penny will be cut, notably from next year's budget. What cuts do the Govt envisage after that?
	Unlike the Opposition and the House of Commons, the Government have access to all the costs of the contracts and all the penalty clauses for the major programmes. Why will the Government not give honest answers about the implications of the cost overruns in the years ahead? We know that there has been serial mismanagement at the MOD, with the equipment programme being somewhere between £6 billion and £35 billion above what can currently be afforded. How will it be reconciled?
	After 12 years of indecision, we finally get a Green Paper weeks before a general election, and, despite all its good words and all the good intentions of the Secretary of State, the future defence budget of the United Kingdom will have to be determined against the backdrop of Government debt of £799 billion, which is the equivalent of having borrowed £1.1 million every day since the birth of Christ. That our nation's security should be compromised in this way by Labour's historic economic incompetence is truly a national tragedy.

Bob Ainsworth: I thank the hon. Gentleman for his kind comments- despite his motives in making them. Can I just point out one thing to him? He claimed that I made defence cuts in December, yet in the same response he said that we were a little late in providing the wherewithal for the Army in Afghanistan. We did not make defence cuts in December; we prioritised, over three years, £900 million of the core defence budget for equipment that was needed for the Afghan conflict. We are doing that, but he criticises us for not doing it, and then he claims that those measures were cuts when, in fact, they were reprioritisations. They were reprioritisations within a budget that never fell. I do not know whether the hon. Gentleman is prepared to admit or accept that. The budget never fell; I moved money within the budget. It was right to do so, and I make no apology for that, but one thing that I say in the Green Paper-and I think I say it with the genuine support of many people who know about these matters-is that our planning structures will have to be more adaptable. We cannot have planning assumptions that effectively prevent us from moving money within the budget when there are pressing needs; we have to have a structure that supports the adaptability of our armed forces. That must be the overwhelming priority.
	The hon. Gentleman talked about the problems with the equipment programme, but I remind him that it was this Government who commissioned the Gray report. We did so to get to the bottom of problems that do exist but, when judged against international comparators, are no worse than hardly any and, indeed, better than many. But, those problems need to be addressed, and there are inefficiencies. We commissioned the Gray report, and I hope that, when the hon. Gentleman has the time to study it properly, he will see that there is a real way-albeit an uncomfortable one for future Ministers-of ensuring that we have a defence procurement methodology that prevents the overruns that we have had. Transparency will be the main tool for doing that, but regular defence reviews, enshrined in legislation, will help as well.

Nick Harvey: I thank the Defence Secretary for his statement and for the Green Paper, which is a well-judged attempt to frame the questions that the strategic defence review must answer. However, that agenda is unbalanced by the omission of one item: the replacement of Trident. A few minutes ago, the Prime Minister responded to a question about it by looking at the issue from a strategic security point of view, and I agree that that is the starting point, but surely the scale and the timing of any replacement of the Trident deterrent has profound opportunity cost implications for the entirety of the rest of the defence budget. A strategic defence review cannot be genuinely comprehensive if the biggest single strategic and spending decision is parked outwith its framework.
	The statement rightly identified that the strategic defence review needs first to ask, what role does Britain want to play in global security? I agree with the Defence Secretary that it would not be appropriate for us to defend from the goal line, and that we should be prepared to go to distant places in our national interests, but are we going to learn from our mistakes? In particular, the 1998 assumption that we would be quick in and quick out of some engagements has not turned out to be correct. Should we not also learn the lesson that invading Iraq without the support of many of our usual allies and with dubious legal cover made the operation a great deal more difficult to prosecute thereafter?
	I strongly welcome the Defence Secretary's remarks about a greater importance for co-operation within Europe on defence matters. The Americans' strategic interests and financial resources mean that in the next few decades they will not be able to make the contribution to European defence that they have made in previous decades. It is absolutely right that the Americans remain our key strategic ally, but we can contribute more to that relationship if we better harness the efforts of Europe in its own cause.
	An interesting observation in the statement was the restatement of the 1998 assumption that there is no external direct threat to the United Kingdom. The Defence Secretary went on to talk about accelerating reform and the need to be more adaptable. I entirely agree, but I urge him to be bolder and to go further not only with reform, but with making ourselves agile enough to face emerging threats. We still have troops in Germany who seem to be prepared for the unlikely eventuality of the Soviets arriving with their tanks. There is a great deal more work to be done, but I welcome the direction that the Defence Secretary has pointed out.
	Finally, we still have troops in Afghanistan, and we will have for many years yet. We know that there is pressure on the defence budget, but surely we all agree that ensuring that those troops continue to have everything they need is the top priority that cannot be sacrificed to anything else.

Bob Ainsworth: I thank the hon. Gentleman for his response. He takes these issues seriously and studies them, and I hope that he finds the Green Paper a useful tool for his thinking as we move towards the strategic defence review.
	The reason why Trident was not included in the Green Paper was that we had to take a strategic decision in 2006 to replace the deterrent if we genuinely wanted to maintain both the skill base in Barrow and our ability to build nuclear submarines. If we had not taken that decision, the risk to our ability would have been profound, and, having done so, we see no reason to attempt to revisit or re-take it. If we did so, that would be destructive. We took the decision, and the time scales in developing nuclear submarines are considerable. That is why the decision had to be taken when it was.
	The hon. Gentleman will find that the Green Paper acknowledges that the possibility of quick in, quick out was thought about and hoped for. However, we have not been able or prepared to remove ourselves from some of our operations, and we have been enduring counter-insurgency as a result. That has profound implications, because if we want to maintain our ability to conduct operations like those that we are undertaking in Afghanistan, we must address that issue, among others.
	I really believe that the US contribution will continue for the foreseeable future, but I do not believe, as some-not all-Conservative Members do, that there is an alternative to an Atlantic relationship or a European relationship. Our strength in Europe enhances our position with the United States of America. I believe that the two are complementary, and we should pursue both.
	Our forces are based in Germany not in anticipation of the Russians coming over, although that is the historical reason why they are there. They are there because bases were built, and that is where they are based. Over time we have reduced our footprint, and over time I should expect us to continue to do so, but that is effectively their home. I am enormously pleased that they are made welcome in Germany, and that we will continue to have a close relationship with the German authorities.

Linda Gilroy: I welcome the statement and accompanying papers and the emphasis that my right hon. Friend places on adaptability and partnership to meet not only the ongoing commitments in Afghanistan but the uncertainty that lies beyond that. He concluded by saying that he hoped that there would be a mature and well-informed debate about the future structure of our armed forces. Given that this time last year 29 per cent. of personnel deployed in Afghanistan were naval personnel, can he confirm that this work on the future structure of the armed forces will recognise the naval contribution?

Bob Ainsworth: In response to my hon. Friend's final question, yes, of course, it is absolutely necessary and vital that we have that rounded debate and that we appreciate our geographical location and our dependence on the maritime environment. The existence of and necessity for naval capability is therefore an issue that we must consider seriously.
	In many ways, the strategic defence debate has already started, and the Green Paper is a contribution to that. We have already been consulting widely and provoking other people to join in the debate. Papers are coming out of the Royal United Services Institute and other think-tanks and organisations, which are a great contribution to the debate, and those on the Front Benches and Back Benches are turning their minds to it, as are others in the country. I really wanted to encourage that debate when I embarked on this programme, and I hope that this Green Paper has made, and will make, a contribution to it.

James Arbuthnot: I am grateful for prior sight of the statement and of the Green Paper, which is fine, and helpful. I entirely agree with the Secretary of State that the more discussion we can have on this, the better, and I am glad that he has started it off. The Bernard Gray report suggested a 10-year rolling budget. Does the Secretary of State agree that a 10-year indicative planning horizon is a watering down of that proposal, and was it the Treasury that objected?

Bob Ainsworth: The longer the planning horizons that we can have in this regard, the better off we are, so we have obviously been discussing that within Government. The provision of the indicative budgets will be a great help, particularly on the equipment side. However, that, on its own, will not get us to where we need to be. Transparency, uncomfortable though it will be, is something which the right hon. Gentleman's Committee, the Defence Committee, has been advocating for some time, and it will be the big tool in getting us to a better place.

Several hon. Members: rose -

Mr. Speaker: Order. A further 22 right hon. and hon. Members are seeking to catch my eye. I should like to accommodate everybody, but there is important business to follow, so short questions and short answers are required.

David Borrow: On Friday, I will be visiting BAE Systems' plant at Samlesbury in Lancashire, where the joint strike fighter is being built. Some £800 million has been invested in the plant, and the aircraft are due to fly off the two aircraft carriers that my right hon. Friend mentioned. His colleague, the Under-Secretary of State for Defence, my hon. Friend the Member for Grantham and Stamford (Mr. Davies), mentioned to the Defence Committee the Government's commitment to an order of 140 aircraft. I am sure that when I visit the plant on Friday the work force would be pleased if I could confirm that the Secretary of State had made a similar commitment.

Bob Ainsworth: Over time, our plans are to base our air capability principally on two aircraft-the Typhoon and the joint strike fighter. The numbers and the particular capabilities of either of those will need to be considered in the defence review. I hope that my hon. Friend takes heart from the fact that even with the movement of resources in December towards the Afghan mission, I brought forward the Typhoon capability upgrade, which means that I understand the importance of maintaining our air capability.

Nicholas Soames: May I thank the right hon. Gentleman and my hon. Friend the Member for Woodspring (Dr. Fox) for their kind words and say what an honour it was to serve on the Defence Advisory Forum?
	Having heard the Prime Minister's thoroughly slippery and entirely inaccurate answers on defence matters at today's Prime Minister's questions, will the Secretary of State confirm that good though this Green Paper is-and it is a good piece of work-a great deal more thinking needs to go on in respect of foreign policy? The foreign policy baseline needs to be the architecture on which the security and defence review will be based.

Bob Ainsworth: This Green Paper is clearly grounded in the security documentation that the Government have produced, and I hope that it is consistent with our foreign policy objectives; I have no reason to believe that it is not. The Foreign Office has had the same kind of input as the hon. Gentleman has had. We have been showing him drafts, and he has been providing input and helping to mould this work as it has gone forward. I do not think that his fears are well founded; I hope that they are not.

Jeremy Corbyn: If I may say so, I found the Secretary of State's statement rather depressing. There was no mention of a peace process, no mention of international law, and no mention of the United Nations. How on earth can one have a review of defence capabilities without including the nuclear question and the replacement of Trident, which forms such a massive part of our future expenditure? We could save £76 billion over the next 20 years by cancelling the Trident programme, so helping to bring about world disarmament.

Bob Ainsworth: I am not surprised that my hon. Friend and I have failed to reach a consensus on the nuclear issue. If he reads the Green Paper that I have produced-I commend it to him-he will see that the United Nations figures quite considerably. Of course, we want to support the security apparatus that provides not only for our own security but for good relations throughout the world, and the United Nations is a very important part of that. If we can promote peace in any and every way, and to the maximum degree of our ability, we should do so, but we should not be naive in thinking that that will always be the case. We therefore have to accept the need for capable armed forces of the kind that we have today and that we will need in future.

Bernard Jenkin: May I add my thanks to the Secretary of State for the way in which he has sought to engage with a wide range of people on this Green Paper? Does he agree, however, that this would not be the moment for an east of Suez retrenchment of the United Kingdom under financial pressures, that we cannot afford the luxury of withdrawing back to our home base, and that it is extremely unlikely that we can sustain our global role unless we maintain increases in defence expenditure?

Bob Ainsworth: The financial pressures are real, and they will have to be tackled. I agree with the hon. Gentleman that we should not retreat to the goal line, as I put it, and that we should continue to play our part in the world. However, if we are not increasingly efficient and agile in doing so, and if we are not prepared to accept that we have to do it with others-that we cannot be unilaterally secure-then financial pressures may well force us in the direction he describes.

Dari Taylor: I warmly welcome the thoughtful statement by the Secretary of State. In terms of emergent threats, where is the reference to cyber attacks, accepting and acknowledging that, for many, those present the greatest threat to our security?

Bob Ainsworth: Passages in the Green Paper refer to the cyber environment, because we must be mindful of the great vulnerabilities to which we may be subject as we become more technologically dependent. A lot of investment has already been made in cyber defence and associated matters, but it is an issue to which we must give constant thought.

Angus Robertson: I welcome the Secretary of State's statement and the strategic defence review. I note with sadness that he chose not to have talks with all parties in the House; perhaps that can be remedied in future.
	In Scotland, since Labour came to power, more than 10,000 defence jobs have been lost, regiments have been amalgamated, and bases have been closed. According to the Ministry of Defence's own statistics, between 2002 and 2007 there was a £4.3 billion defence underspend in Scotland. Does the Secretary of State agree that the strategic defence review must take account of defence spending and the defence footprint across the nations and regions of the United Kingdom?

Bob Ainsworth: I personally get on very well with the hon. Gentleman-I want to say that at the start. However, I sadly point out rather than in any other way that in seeking to establish the Defence Advisory Forum and capture other political views, if I had thought I would get a constructive contribution from the Scottish National party, I would have included it. However, I genuinely thought that any points from its representatives would have been parochial point scoring rather than genuine input into the planning of the future of defence for the United Kingdom of Great Britain and Northern Ireland.

Gordon Prentice: My friend talks all the time about our people, but a steadily rising number of our people are recruits from the Commonwealth with no direct experience of life in the UK. Does the Green Paper say anything about future manpower planning, if I can use that term, and where the recruits are going to come from?

Bob Ainsworth: What my hon. Friend says was certainly true for a fairly long period, when we had an increasing contingency from across the Commonwealth. That trend has gone down, which may well be connected with the recession and job opportunities-I am not sure. We are now as near as we have ever been to full manning in the Army, but we need to maintain the high-level skills that we need at every rank. We are not talking just about officers, and when we see how our armed forces operate we see that they need more than bravery. The adaptability and brain power that the lower ranks bring to problem solving is impressive, so of course we must plan for how we can keep those people satisfied and employed in the armed forces.

Douglas Carswell: Will the strategic review allow for more off-the-shelf procurement? Will it call time on the ruinously wasteful protectionism in the defence industrial strategy, and if not, why not?

Bob Ainsworth: The hon. Gentleman takes the view, which is not widely shared in the House, that we can simply buy cheaply and readily off the shelf from what is available on the market. There would be consequences for us in doing that. If we buy jets, helicopters or ships from abroad and lose the technological capability to produce such items ourselves, we will probably never be able to gain it again, and we will be sold what is effectively second-class equipment. That is the inevitable consequence. It may well be cheaper, but it will probably be second-class. That is why we have the defence industrial strategy, which decides where we can afford to go in the market, where we can afford to buy cheaply and where we need to maintain our own industrial capability onshore.

Clive Efford: The public's response to soldiers returning from conflicts has demonstrated that they want our armed forces and the members of them to be held in the highest regard. Will my right hon. Friend ensure that part of the review is the care and rehabilitation of soldiers returning from conflicts, who often come back traumatised and needing support, and particularly ensuring that those who are injured in the service of their country get the best form of treatment and that the families of the fallen are looked after?

Bob Ainsworth: We need to recognise that the way in which we treat our armed forces has an impact on our ability to recruit the high-calibre people whom we want. The detailed work on how we take forward our welfare programmes for both veterans and serving personnel is being undertaken by the Under-Secretary of State, my hon. Friend the Member for North Durham (Mr. Jones). There are aspects that we yet want to improve, despite the improvements that we have made over the years in the service personnel Command Paper and so on, and we may make further statements in the near future on aspects of welfare for parts of our armed forces.

Alan Duncan: How can the Secretary of State justify taking the decision now to close RAF Cottesmore in Rutland before the completion of the defence review, when the economics of doing so must be totally unclear?

Bob Ainsworth: I understand that the hon. Gentleman is representing his constituents assiduously, but the needs of Afghanistan and the priority that needed to be given to it, and therefore the need to continue to take the money that was specifically available for the operation from the Treasury reserve and to adjust the core budget, were justifiable and overriding. There were consequences of that, and I am sad to say that one of them fell in his constituency.

Ian Davidson: May I ask the Secretary of State how successful he has been in building a consensus with the Opposition parties on the future of the Royal Navy and the need for there to be thousands of jobs in the UK in building aircraft carriers? In the drive to build a consensus, is he willing to meet representatives of the work force engaged in building the carriers, and will he use his good offices to try to arrange meetings with the leaders of the Opposition parties so that they can hopefully be drawn into that consensus?

Bob Ainsworth: We took the decision to build the carriers, and my hon. Friend was deeply disappointed that we did not decide to build five or six rather than the two to which we committed. However, we took that decision and are getting on with it, and the carriers are in the process of being built. I know that the Opposition's policy needs to be flushed out-he is very good at doing that, and I wish him every success-but in producing the Green Paper I never sought to divide people. I sought to bring them together.

Ian Taylor: I commend the Secretary of State for raising as one of his strategic questions the matter of armed forces ensuring security and contributing to resilience in the UK. The Institute for Public Policy Research's commission on national security, of which I was a member, stressed the importance of that. Has he looked again at the 1960s civil contingencies legislation and considered whether we should have a homeland security force, who would staff it and how it would work with the Home Office and local government agencies? That is a serious matter in protecting our critical national infrastructure, particularly if we get pandemics.

Bob Ainsworth: It is true to say that we have been going in the opposite direction, because other organisations, particularly the police, have developed better capabilities so that they do not depend on our armed forces. However, we need to think through how far that process should go. That is why the matter is flagged up in the Green Paper, so that we can consider it, tackle it and come to a conclusion.

Bob Russell: The Secretary of State said, Our biggest capability is our people...military and civilian, and their ability to deliver defence. He was completely silent on the need for decent housing, whether it be single or family accommodation. Although I acknowledge the disaster of the privatisation of family housing by the previous Government, does he agree that the Government have had plenty of time to put that right? If retention is still an important part of the Government's thinking, decent housing for our married soldiers is a priority.

Bob Ainsworth: The hon. Gentleman knows that we have invested hugely in the estate, and his constituency and constituents have been the beneficiaries of considerable investment. However, we need to consider to what degree our structures should encourage home ownership among our armed forces. Many of them are going that way in any case, so we must consider to what degree we should continue to encourage them to be tied to the provision of housing that goes with accompanied service. We have to grapple with that issue, and it is raised in the Green Paper so that we can think about it in the defence strategic review.
	People worry about the potential effects of losing accompanied service accommodation, but societal trends appear to be going in that direction in any case. It seems to be the desire of most people to own their own home, and that applies to service personnel as to anybody else.

David Tredinnick: Bernard Gray found that too many types of equipment were being ordered for too many tasks at too high a specification. Is it not a great sadness that the Government have only just commissioned this review, having been in office for so long? Does not the Secretary of State feel that some of the problems in defence lie at the very heart of his Department?

Bob Ainsworth: When one looks for international comparators, one struggles to find anybody who does such things in a pristine manner. We are no worse than many, many others, but there is huge ground for improvement in my opinion. That is why my predecessor commissioned Bernard Gray to do that report in the first place, and why the Minister of State, Lord Paul Drayson, took a hold of it and produced the acquisition reform strategy, which I think will address the issues raised by the hon. Gentleman.

Michael Jack: The Secretary of State will be aware of the developing world-class technology at BAE Warton in my constituency, which is seeing the production of unmanned and autonomous air vehicles. Will the debate he has triggered by the publication of the Green Paper enable a decision to be made as to whether that technology should be counted as a sovereign technology for the United Kingdom?

Bob Ainsworth: Yes, that is something that has got to be looked at. I would just remind the right hon. Gentleman that some of his hon. Friends suggested that I was paying for today at the expense of tomorrow when I moved some resources for the purchase of drones. I think such capability is exactly tomorrow, whether that means in Afghanistan or anywhere else. The kind of thing the right hon. Gentleman mentioned is what we need to think about.

Jeffrey M Donaldson: May I assure the Secretary of State that we in Northern Ireland and our friends in Scotland and Wales are not parochial when it comes to providing our best young people-men and women-to serve in the armed forces? Will he advise the House what proposals are contained in the Green Paper to help to encourage young people to join, particularly in the light of the proposals on the university officer training corps and the Army Cadet Force?

Bob Ainsworth: I would add to what the right hon. Gentleman says by saying that Northern Ireland provides a home base for 19 Light Brigade, which is greatly appreciated.
	We will get the talent that we need in the armed forces only if people think it is an organisation that has a future in which they can build their careers and to which they can make a real contribution. That impacts not only on welfare provision-soldiers are interested in that, but they are also interested in the kind of organisation that they are joining. They want to join capable armed forces. Planning properly for the future to ensure that they can fulfil a role is the biggest single contribution we can make to attracting the talent we need.

Julian Brazier: It is welcome that the Green Paper contains a number of references to reserve forces, following from the question asked by the right hon. Member for Lagan Valley (Mr. Donaldson). In their review, are the Government going to address the questions why we strike the balance between reserves and regulars so very differently from most of our English-speaking counterparts, and why they are able to make so much more imaginative use of reserves than us?

Bob Ainsworth: I hope so. That is why those passages are there. I think societal trends will push us, in the long term, in the direction of making more use, not less, of reserve forces. Therefore, the need to ensure that they are highly trained and capable people is going to take on increasing importance. Those issues are flagged up in the Green Paper and the questions that we have posed are out there for debate, and I hope that that matter will be addressed in the strategic defence review.

William Cash: Does the Secretary of State note, seeing as he has made the statement, that there is not a single reference to NATO in it, which is simply stupendous and quite astonishing? Why is there also no reference to the European Union? Europe is one thing and allies are another. Can he remember what happened with the French off Djibouti? Can he remember what happened when the Belgians would not provide us with any ammunition? Can he remember what happened over the Iraq conflict? Can he remember what happened with respect to the Germans in Afghanistan? Does he not realise that we must have a proper, coherent policy that includes NATO?

Mr. Speaker: Order. That was a quintet of questions, but one answer will suffice.

Bob Ainsworth: Unless I misread my speech or there was a late draft or whatever, NATO, the European Union and the United States of America were all mentioned. The hon. Gentleman will find that they are liberally mentioned-appropriately-in the Green Paper, which I commend to him.

Philip Hollobone: Should there not be a step change increase in the use of our reserve forces if we are to provide Her Majesty with a more flexible, adaptable and cost-effective armed forces in future? Is this not the golden opportunity of a generation to do that?

Bob Ainsworth: Maybe. The question has been raised and the strategic defence review will have to answer it, and the hon. Gentleman has views that he will want to make known.

Ann Winterton: Was it not the Ministry's preoccupation with the European Union project for the future rapid effect system that prevented it having the ability to respond to the needs of our soldiers in both Iraq and Afghanistan, leading to a shortage of appropriate equipment in both protected vehicles and, indeed, helicopters? Did I not note that the Secretary of State mentioned further integration as far as the European Union and defence are concerned, and may I warn him not to go down that route? If he does, caveat emptor.

Bob Ainsworth: The hon. Lady has looked into vehicle capability and developed quite a level of expertise in that area, but she knows that I fundamentally disagree with her. The vehicles that we have to have specifically to fight the mine threat in Afghanistan are superb and exactly what is needed, but they would be of little use in different scenarios, such as a high-end attack from a capable and well equipped enemy. A Mastiff would not last very long on a fast-moving battlefield. Therefore, as I have said, we must plan for the many threats that we might face. Directing all our resources towards Afghanistan is something that we would need to think very seriously about.

Peter Bone: Will the Secretary of State expand his thinking about integration with our European allies? Would that ultimately lead to a situation in which some operations could not be conducted without their support?

Bob Ainsworth: One of the big questions we must face is to what degree we are prepared to integrate with, and therefore become dependent upon, our allies, whether that is NATO or the EU, or the US, with which we have a close association in military affairs. That is something that we must think about, but there are people in the House-I do not know whether the hon. Gentleman is one of them-who have a view that we can be secure unilaterally. However, I do not think that even the US can be secure unilaterally in the modern world. Therefore, we must invest in our friends and alliances-we have no choice but to do so.

Crispin Blunt: Until 1997, there was an annual defence White Paper, which was, to a significant degree, the public presentation of the product of the long-term costings exercise inside the Department, which reconciled the defence programme 10 years out. The absence of that process or of any replacement for it means that the forward defence programme is now bearing all the risk. That was enumerated by Mr. Bernard Gray, who said in his report that
	the forward Defence programme faces
	real financial pressures. I am afraid that the Secretary of State and his predecessors, but most of all the Prime Minister, who has been either Prime Minister or Chancellor throughout that period, have to bear the responsibility for this disaster for defence-that is what it is-and reconcile it with the worst fiscal crisis for the Government since the Invergordon mutiny.

Bob Ainsworth: Equally, I heard the Prime Minister not so long ago tell the hon. Gentleman and his hon. Friends that it was they who went into the last election pledged to a £1.5 billion cut in the defence budget.

Desecration of War Memorials

Motion for leave to bring in a Bill (Standing Order No. 23)

David Burrowes: I beg to move,
	That leave be given to bring in a Bill to amend the law to make provision about damage to war memorials; and for connected purposes.
	Every Remembrance Sunday, war memorials up and down the country become the focal point for our national ceremony of remembrance. From the plainest monuments to the grand Cenotaph in Whitehall, people gather to remember the glorious dead. For the rest of the year, war memorials fade from the public consciousness into the background of our lives. But they are still there, exuding a quiet dignity tinged with sadness for those who have died for our country. They are more than rock and stone. In fact, the estimated 100,000 war memorials take the form of plaques, inscriptions on church pews, statues, arches and even bus shelters. But whatever the form, they symbolise the values of service and sacrifice for our liberty that our country holds dear.
	Conflicts such as that in Afghanistan have sadly made remembrance a continuous part of our national life. Today, the Prime Minister again read out the names of those soldiers who have died in Afghanistan in our name. Those names, like those that have gone before them, will not be forgotten. That is what we say, and we act-in one way-by inscribing those names on memorials.
	I wish to introduce this Bill to ensure that we reflect the importance of war memorials. If enacted, the Bill would properly punish those who show such disregard by desecrating a war memorial. With the death of Harry Patch, the last human thread connecting us to the great war generation may have been cut, but that makes it all the more incumbent on us to retain and protect the physical thread that connects us to Harry Patch's generation in the form of memorials.
	My interest in this issue was sadly first prompted by an appalling act of theft and criminal damage to the Southgate memorial in Broomfield park in my constituency last August. Two six-foot-by-four-foot bronze plaques and nine smaller plates bearing the names of soldiers who died in the two world wars, alongside civilians from Southgate who were killed in the blitz, were ripped out. We were outraged by this despicable act. In 1949, when opening the Southgate memorial, Alderman Wauthier said:
	The Garden of Remembrance is a hallowed place and should not be interfered with.
	Sixty years later, it was disgracefully interfered with, and the purpose of this Bill is to ensure that culprits get the punishment they deserve.
	The national media asked how this could happen. One radio programme was even dedicated to the question of whether Enfield was the meanest borough in London. I set about finding out whether this desecration is unique to my constituency. I take no pleasure in reporting to the House that in fact there have been an alarming number of incidents-57 reports in regional and national press in the last year of desecration of war memorials involving vandalism, theft and even public urination and defecation. This averages out to at least one war memorial being desecrated every week. In fact, the lack of any specific reporting of such offences means that the number of desecrations is probably much higher.
	What particularly troubled me about the desecration in my constituency was that the bronze plaques were practically irreplaceable. We did not have any records of the names that were inscribed, and so when these plaques were stolen there was a good chance that the names, and the memory, of those soldiers could have been lost forever. It sickens me-and, no doubt, the House-to think of those plates being melted down for scrap and those names being consigned to oblivion. Thankfully, a local man who had taken extensive photographs of the memorial a few years ago came forward. Together with the good work of the UK National Inventory of War Memorials, we are now able to replace the plaques. Other communities are not so lucky, with many memorials not properly registered and recorded.
	The War Memorials Trust together with the national inventory, based at the Imperial War museum, are doing a sterling job to encourage registration of memorials, but only 55,000 have so far been registered. I urge hon. Members to find out how many war memorials there are in their constituency by contacting the national inventory, and -as they pound the streets and visit community buildings in the coming weeks-to keep an eye out not only for floating voters, but for unregistered war memorials.
	The War Memorials Trust, which relies on voluntary support, deserves our membership and support for its commendable and tireless work to protect war memorials. The hon. Member for Cleethorpes (Shona McIsaac) has previously raised this important issue, and we need to be vigilant and take action to reverse the neglect that is the greatest threat to memorials.
	War memorials do not have any dedicated legal protection. When damage is caused through criminal acts or neglect, the common question is who is responsible for repair and restoration. In my constituency, thankfully, Enfield council quickly responded by temporarily replacing the plaques, and they will soon be fully restored. However, the law needs to reflect the impact of desecration. There is, of course, the physical damage and the financial cost to the community of cleaning away the graffiti, repairing damage or replacing any stolen items such as bronze plaques. Many memorials were erected in the aftermath of the first world war and have since become a part of our heritage and our community. They are our connection to the past. The desecrators not only cause damage and steal property, but break the crucial link with past generations who have provided the remembrance. Such a break can sometimes be irreparable. More fundamentally, war memorials represent the values of our country. An attack on a war memorial represents an attack on our deeply held values, our freedoms and our democracy.
	Who are those people carrying out these acts of desecration? Some incidents, like the widely reported case of a Leeds student urinating on a war memorial, are the result of reckless binge drinking. Then there are the mindless acts of destruction where memorials are smashed to bits and nothing taken. Finally, and most serious of all, are the deliberate attacks aimed at desecrating the symbolic value of war memorials. I have come across several incidents of Nazi swastikas being sprayed on to war memorials. One of these included a memorial built to remember the victims of the holocaust. I find this particularly abhorrent, given that many of those memorials commemorate men who died fighting to keep this country free of fascism. Whether the actions are as a result of disrespect or deliberate malice, we must have tough sanctions.
	So what is the state of the law at the moment? Currently there is no specific provision for desecration of a war memorial. The problem with the law, as it stands, is that it primarily accounts for seriousness on the basis of financial value of the damage. Unless the damage caused costs more than £5,000 to repair and replace, the maximum sentence that the magistrates court can hand down is three months in prison. This simply does not accurately reflect the seriousness of the crime.
	The Bill would amend the Criminal Damage Act 1971 to recognise damage to war memorials. Crown Court judges would have the power to deal with these cases, with up to 10 years imprisonment at their disposal. Presently, there are no complete figures for attacks on war memorials. By recognising war memorials in statute, we would help the reporting of such incidents. Another benefit of this Bill would be the creation of a proper legal definition for war memorials. This has been the aim of the War Memorials Trust for some time. By clarifying this definition, we would not just be able to tackle desecration, but also the problem of neglect.
	I appreciate that my Bill has no chance of becoming law in this Parliament, but I hope that a future Parliament will consider the whole issue of protection of war memorials. In the meantime, I hope that sentencing guidelines can be revised. Also I am sure that a war memorials all-party parliamentary group will be shortly formed, with a challenge for 2014 on the centenary of the outbreak of the first world war to have all memorials properly registered.
	In 1949, the Southgate mayor said:
	Time may dim our recollections of the heroic days of the war but will never obscure the gratitude we shall hold for those who fell. This memorial is living testimony to those of whom we in Southgate are proud. We shall not forget.
	This Bill says that we as a House and country shall not forget.
	 Question put and agreed to.
	 Ordered,
	That Mr. David Burrowes, Shona McIsaac, Robert Key, Jim Sheridan, Dr. Andrew Murrison, Mr. Colin Breed, Mr. Charles Walker, Mike Penning, Angela Watkinson, Mr. Graham Stuart, John Mann and Michael Fabricant present the Bill.
	Mr. David Burrowes accordingly presented the Bill.
	 Bill read the First time; to be read  a Second time on Friday 30 April, and to be printed (Bill 60).

Police Grant Report

David Hanson: I beg to move,
	That the Police Grant Report (England and Wales) for 2010-11 (HC 278), which was laid before this House on 20 January, be approved.
	This debate takes place against a backdrop of record falls in crime and record levels of police numbers. One thing that can be said about the Government, more than anything else, is that we have invested in police and policing numbers, not just through neighbourhood policing, protective services and collaboration programmes, but in relation to all aspects of the police service. I am delighted, therefore, that the British crime survey and figures last week showed a marked reduction in crime for 2008-09, compared with 2007-08.
	It is worth placing that on the record because the police do a magnificent job, as has been shown by the fact that over the past year total recorded crime fell by 5 per cent.; vehicle crime by 10 per cent.; violence against the person by 6 per cent; robbery by 5 per cent.; sexual offences by 4 per cent.; robbery with a knife by 2 per cent.; and firearm offences by 17 per cent. Challenges remain, but I put it to the House that, whatever is said in this debate, those figures are good, particularly given that we are coming out of a recession. Normally, under such circumstances, crime would rise, but actually, over the past 12 months, in what have been-by any stretch of the imagination-challenging financial circumstances, crime has fallen.
	That can be added to the overall drop in crime of 36 per cent. since 1997, which is a very positive thing. The House will also know that the British crime survey last week showed that confidence in policing is now at 50 per cent. and that the chance of being a victim of crime is the lowest since records began. That is the backdrop to today's settlement and discussion. Coupled with those falls in crime, last week I was able to announce historically high numbers of police officers and staff on the streets. Figures published last week show that police officer strength remains at 142,688, which is an increase of nearly 17,000 officers over the past 13 years.
	Obviously there are variations, challenges and difficulties, which no doubt will come out in the debate, but the record numbers of police officers, and indeed police community support officers-more than 16,000-show that today's settlement is building on a history of strong settlements that have seen crime fall, policing numbers rise and the introduction of PCSOs. The levels of confidence in policing and the fact that a person's chance of being a victim of crime is the lowest ever show that the Government have done a good job to date.

Paul Truswell: My right hon. Friend will be aware that the Government improved the funding formula for West Yorkshire police. Nevertheless, it is still £18 million adrift of the figure it would get were it fully funded. Will he and his colleagues consider how police authorities such as West Yorkshire can bridge that gap, so that they can continue to enjoy record levels of police officers and the subsequent major impact on crime?

David Hanson: I will return to the funding formula later because it is an important issue, and a number of representations have been made by different forces about some of the inequities in the funding formula. We are currently considering the matter, and will continue to do so in the future, but my hon. Friend will know that, this year, West Yorkshire police saw an increase of 3.3 per cent.-£11.3 million-for the next financial year. Historically, West Yorkshire police funding has increased 37 per cent. in real terms over the past 13 years.

Stewart Jackson: Why has the Home Office consistently failed, until recently-with the migration impact forum-properly to take into account the significant impact on crime and policing of large-scale migration since May 2004 from eastern European countries? Does the Minister agree that that has had a significant ramification on the number of police whom people in Cambridgeshire, where my constituency is located, expect to see on the beat? Why is that the case?

David Hanson: As the hon. Gentleman will know, that is one of the issues on which we have received representations, including from the chief constable of his own force. However, I hope that when he reflects on Cambridgeshire police funding, he will be pleased that the Labour Government have delivered an extra 109 police officers to his force in the past 13 years, that 33 per cent. more resource is going in than did under the Tory Government, and that even this year, in these challenging times, his force has £2.5 million more than it did last year-and all that from a Labour Government! I hope that he recognises those facts when he talks to his local police authority about the Government's performance in those areas.

Stewart Jackson: indicated dissent.

David Hanson: The hon. Gentleman is not happy?

Stewart Jackson: My chief constable is not happy!

David Hanson: Those figures are facts. They relate to the funding given by the Labour Government to Cambridgeshire police. The hon. Gentleman needs to recognise that fact. But let us put that to one side.

Simon Hughes: Funding statistics and formulae are important, although most people are more worried about outcomes than how we get there, but can the Minister assure us that the population figures, whether or not they include people on the electoral register, are up to date as the basis of the formula? That has been a recurrent issue for local government and other service funders in London. Will he also comment on the fact that there is still some doubt about the veracity of the crime figures, which-if he is to be believed-are falling? Although that is to be welcomed, to have public confidence the figures ought to be arrived at in an entirely neutral way and separate from the Government as far as possible.

David Hanson: The crime figures which I commented on-not announced-10 days ago were announced by the Office for National Statistics, which is independent of the Government. Indeed, I only see the crime figures as a matter of courtesy a few hours before they are produced, so they are independent. I do not gerrymander them. I take the hon. Gentleman's point about the important population issues, but under any measure crime has fallen across England and Wales over the past 13 years, including in London and key areas as a whole.

Bob Spink: The Minister will know that police numbers in Essex have increased, and he will probably have guessed that I will seek to claim credit for that. However, people out there know that the real reason is that the Government have increased funding to enable police numbers in Essex to increase, and I thank him for that. However, will he use innovative surveillance and high-tech equipment to improve policing-for instance, vehicle automatic number plate recognition systems? We need those to clamp down on burglaries, which are a particular problem on Canvey island, for instance.

David Hanson: I am grateful to the hon. Gentleman for his support. He recognises, as I do, that there has been a 30 per cent. real-terms increase in funding for Essex, that there will be a £5.2 million increase-2.9 per cent.-next year and that there has been an historical fall in crime over the past five years of nearly 6 per cent. I fully accept that there is always more that we can do, and the automatic number plate recognition is a valuable tool-I know from my constituency how it helps to identify potential vehicle crime and to reduce crime. However, it relates to issues not only of vehicle crime, but of mobile burglary and people who cross borders to commit crimes. I certainly, therefore, encourage and support its further use, for which we should all be grateful.
	Let me turn to the nub of today's debate. The police revenue support grant, which was laid on 20 January, confirmed the indicative figures, and we are implementing the 2010-11 funding settlement as announced in December 2007, which is good news for the police. Between 1997 and 2010-11, we have increased the police service grant by about £3.7 billion-a cash increase of 60 per cent. and a real-terms increase of almost 20 per cent. The figures that I gave to the hon. Member for Peterborough (Mr. Jackson) can be replicated across the board in every police authority in England and Wales and represent a substantial increase in funding. They show that this year total Government funding for the 2010-11 cycle in today's report will be more than £9.7 billion-an overall increase of 2.7 per cent. on 2009-10. Some £8.5 billion of that provision is for the police general formula grant, and there is also an additional £1.2 million in specific grant funding, to which I will return later.
	We gave those commitments several years ago. In fact, they were probably given by my right hon. Friend the Member for Harrow, East (Mr. McNulty), who is with us today, as part of the three-year cycle of this comprehensive review. We kept those commitments and delivered on them in 2008 and 2009, and now in 2010-11. We have also kept ring-fenced funding to a minimum, so that we can allow forces the maximum flexibility in deciding how to allocate and spend their resources. The police grant deals with Home Office general police grant for revenue expenditure. The amounts for individual police authorities are set out in the papers before the House today, and I hope that they will be generally welcomed.
	We have set a minimum floor of 2.5 per cent. for the grant provision for 2010-11. My hon. Friend the Member for Pudsey (Mr. Truswell), who raised this issue, will know that, whatever our views on the funding formula, the fact that we have set a minimum rise of 2.5 per cent. is helpful to many forces. It means that each police authority in England and Wales is guaranteed an increase of at least that level. In my view, that is a positive announcement. We are trying to strike what I would describe as a sensible balance on the issues in economically challenging times.
	Indeed, I would be interested to hear from the hon. Member for Bury St. Edmunds (Mr. Ruffley) about whether, in what I would obviously see as the unlikely event of a change of Government, he will commit himself to the 2.5 per cent. increase that we have put in place for next year, whether he will support that funding for police community support officers, and whether he will support the ring-fencing of that funding, because those are crucial matters that will form part of our debate between now and whenever my right hon. Friend the Prime Minister calls the general election. We want to look at the funding formula review, and we will do so shortly. I hope that we will be in a position to do that in the next 12 months.
	There has been no change to rule 2 grants since the start of the current spending review, in 2008-09. Police authorities have complete flexibility on how best to use that resource.
	Specifically on the settlement, we have also put in place absolutely committed funding for neighbourhood policing, as the foundation for local police in the 21st century. That is why, for 2010-11 we are maintaining and increasing the ring-fenced funding that helps to support those 16,000 police community support officers. I look forward to hearing the hon. Gentleman make a commitment to fund those 16,000 PCSOs next year, in the unlikely event of a change of Government, or at least supporting me from the Opposition Benches for the good that the Government are doing on that. PCSOs provide a valuable resource, delivering on the policing pledge commitments and raising public confidence. Neighbourhood policing is the key. That investment is making a difference and contributing to the crime falls that I mentioned. We will shortly produce a safe and confident neighbourhoods strategy, which will look at how we develop the policy still further. I look forward to giving the House details of that, I hope within the next month.
	As well as the policing of local communities, which is the bedrock of our activity, we also need to look at protective services and the collaboration programme, to ensure that we drive up and develop minimum standards across the board. We have made an additional £2.2 million available in the settlement today to help deliver regional capability in tackling regional crime, which is a serious issue and one that we need to address. We are keen to ensure that we aid the police in reducing crime and have designed programmes accordingly.
	In today's announcement, we have also committed to the basic command unit fund and ensured that forces receive the same allocation in 2010-11-a total of £40 million-as previously. From my perspective, public confidence is at the heart of our agenda-public confidence on issues such as antisocial behaviour and crimes that matter locally, which are best dealt with by locally supported forces. That £40 million is extremely valuable.
	In the document before the House, we have also confirmed the capital spending for supported capital expenditure for next year. Again, I say to the hon. Gentleman and others that we have committed a total of £220 million. That is money that we said we would allocate previously-we have committed to it and continued to support it. That has meant some difficult and challenging decisions, but, by making that commitment today, we have been able to support that capital expenditure firmly, which is good news for the police in dealing with the capital issues that they need to address.
	Almost finally, for Welsh police authorities, which are close to my heart as a Member of Parliament representing a Welsh constituency, we have set a minimum increase in the grant, in line with English authorities. We have again adjusted the Home Office police grant for Welsh police authorities, to maintain consistency with those in England. The additional support will total £16 million this year and will help to maintain police numbers and reduce crime.
	I should also like to report to the House that we asked for, and received, representations in our consultation on the settlement. However, I received only four sets of written representations about the settlement, from four police authority areas. That is fewer than in previous years and a little more than a quarter of the representations that were received last year. That indicates the level of support not just in the House, but in the community, for the proposals that I am putting before the House. Following those representations, we have laid the papers before the House, which in my view show a good settlement, which is something that we need to take into account.
	The pre-Budget report of December 2009 is also crucial to our consideration today. It has enhanced our immediate understanding of the future funding of the police, by announcing, through my right hon. Friend the Chancellor of the Exchequer, that sufficient funding will be made available to 2012-13 to enable police authorities to maintain the current numbers of warranted police officers, as well as police community support officers and other staff exercising police powers. Again, that is a commitment from this Government to real money, on the table, to fund real police officers out on the street, reducing crime still further.
	I do not wish to be too political-although we are in interesting times-but that is a commitment on the funding to date that was announced in the pre-Budget report. I hope that that commitment will be subject to debate, and I look forward to receiving the hon. Gentleman's support, because it sets the framework for the confidence that police authorities can have in knowing that the record numbers of police that we have provided will continue, should they wish them to.
	Next year we will also maximise the increase in the general grant, providing a further £2.5 million to ensure that all police authorities have received that minimum increase. Again, at a time of falling public spending and challenges, which normally increase in a recession, that is a good indicator of the extra resources that are being supplied, and that at a time of falling crime.
	My right hon. Friend the Secretary of State for Communities and Local Government will speak later on the implications for local government spending of police funding. However, there will also be debates and consideration about the capping action, decided in 2008-09, on Cheshire, Leicestershire and Warwickshire, in advance of the 2010-11 settlement, as a result of previous excessive increases set by those authorities. Cheshire and Leicestershire have accepted their caps, whereas Warwickshire will be debated as part of our discussions later today. However, despite those difficulties and challenges locally, there are genuine funding increases today that we should welcome.
	In summary, we have positive falls in crime, record numbers of police and a commitment next year to a minimum of 2.5 per cent. for each force. That is good news at a time of recession. We are seeking greater value for money from police authorities generally, and there will be a drive next year to look at issues that we raised in the White Paper and commented on yesterday, in producing our high-level group report on value for money. We need to drive better efficiency and value in the system. We need to ensure that we reduce police overtime and look at better procurement and the better deployment of officers. However, the resource is there, and this House can commit to it today. I hope that Members in all parts of the House will commit to it, because this Government have a proud record on policing and police numbers. I want that to continue next year, and I commend the motion to the House.

David Ruffley: The one thing that we can agree on in this debate is that the police of this country do a difficult and usually very dangerous job. On behalf of the Opposition, I would like to pay tribute to their service. They need the resources to discharge their duties to the public in upholding law and order, which is why this debate is so important. This year's settlement is the final part of the three-year comprehensive spending review. Excluding additional grants for counter-terrorism and other specific grants, the police settlement will increase by 2.7 per cent. this year. Including specific grants, total revenue funding will also increase by 2.7 per cent.
	It is worth flagging up a few issues that many outside this House, and not just police authorities, have with the distribution of the police grant. It is a complicated calculation, based, as we know, on five separate components, including the needs-based formula, or the principal formula; additional rule 1, which reduces grant provision for the South Wales police authority and redistributes it to other police authorities in Wales; and additional rule 2. In the past, the Home Secretary distributed specific grants such as the rural policing grant, the forensic grant and the initial police learning and development programme grant. The Home Office decision to amalgamate those grants into a single pot, so that police authorities could have more control over how those funds were used, was welcome. The Home Office also distributes specific grants for police authorities. Finally, the police grant floors are applied. I will return to that issue of scaling later.
	What we do know is that this year there are 20 police authorities in total receiving the lowest increase of 2.5 per cent., including Cheshire, Gloucestershire, Lincolnshire, Suffolk, Surrey and the Met. The biggest increase in the police grant is received by the West Midlands at 3.9 per cent.
	Let me go to the heart of what I took to be the political thrust of the Minister's speech. We are in a severe economic situation and it has added huge strain to already tight police budgets. In written evidence provided to the Home Affairs Committee for its report on police service strength, the Association of Police Authorities
	acknowledged the deteriorating state of public finances
	and the expected impact on police budgets. Similarly, a study undertaken by the Association of Chief Police Officers' finance and resources business area found that several forces in England and Wales-this is the crucial point that I would like the Minister to return to-were already using budget reserves to maintain front-line services.
	There is increasing confusion about police officer numbers and police strength, with evidence from police forces contradicting what the Minister is asking us to believe. In research for its report into police strength, the Home Affairs Committee-I am sad that the excellent Chairman of that Committee, the right hon. Member for Leicester, East (Keith Vaz), is not here to confirm this-wrote to all police forces in England and Wales and asked them to provide information on their officer and staff numbers; crucially, likely changes to the work force during the remainder of 2009-10 and 2010-11; and the plans that the forces are putting in place in relation to staffing levels next year.
	The responses were very interesting. They were clear. Just four forces anticipated maintaining staff and officer levels. Some forces had already begun to reduce officer numbers and many have plans to do so. To provide one or two examples, Humberside police force said that it was planning to cut 300 officer posts. Cumbria said that there are
	cuts likely of staff and officers.
	Derbyshire said that police staff cuts will be likely, and Durham is planning a
	vacancy freeze on staff and officer posts.
	Kent said that it had
	significant planned police staff reductions for 2009-11 to meet funding savings.
	Out of 43 forces, only four said that they anticipated maintaining staffing levels.

Stewart Jackson: Are we seeing a pattern here in terms of grand promises prior to a general election that are not delivered? Does my hon. Friend remember that before the 2005 general election the Government promised 24,000 new community support officers? In fact it delivered just 16,000, 8,000 short, a clear broken promise in their manifesto.

David Ruffley: My hon. Friend is exactly right.

Karen Buck: Will the hon. Gentleman give way?

David Ruffley: I will in a minute.
	At this stage of the Parliament, words are quite cheap. Promises are quite cheap, but the evidence that the Home Affairs Committee has given and that we all hear about is there for the Minister to confront and explain.

David Hanson: Could we get down to specifics? The grant is before the House today. It increases funding by a minimum of 2.5 per cent. and overall by 2.7 per cent. If the hon. Gentleman were sitting on this Bench, what figure would he put on the grant increase over and above what we are proposing? Will he give a commitment today to do that? I do not think that he will, as his party is committed to cutting public spending.

David Ruffley: The shadow Chancellor of the Exchequer has made it quite clear that we will make a decision when we write our next Budget. We are still waiting for two things. We are waiting for a Budget from this Government. Also, no CSR was put in place, even though it was open to the Government to do that.
	I want to get back to the promises that the Government are making about 2010-11. The Minister has given us all sorts of blandishments about how everything will be fine and everything will be maintained, but the evidence that I have been reading out completely undermines everything that he has been saying. To make promises about what will happen in 2010-11 is impossible; the evidence shows that it is not possible. I want to hear from the Minister why he believes that this settlement will maintain what he says it will maintain, because the evidence is quite to the contrary.

David Hanson: I will try again. If the hon. Gentleman has the opportunity to increase the 2010-11 settlement over and above the 2.5 per cent. to the 2.7 per cent. average, will he do that? If he were in my position now, or if he were in my position in eight or nine weeks, would he increase next year's money? We have already announced today the funding that the grant will provide.

David Ruffley: I think that the shadow Chancellor has made the position entirely clear, and we will present a Budget should we be in a position to do so, but I still do not think that the Minister has explained why all these authorities that we have talked about-including Humberside, Cumbria, Derbyshire-are saying that there will be a cut in police strength. It flies in the face of what the Minister has been promising.

Karen Buck: Will the hon. Gentleman give way?

David Ruffley: In a minute.
	I want to test further what the Government are saying will happen in 2010-11 on the basis of the grant settlement. I was troubled by what the Chancellor said in his statement on the pre-Budget report, because it does not make sense to a lot of those in the police service. He said:
	I am today able to offer...sufficient funding to maintain the number of police and community support officers. That means that I can confirm not just that we will increase spending as planned next year on hospitals, schools and policing, but we can pledge that spending on these crucial front-line services will continue to rise over and above inflation after 2010-11.-[ Official Report, 9 December 2009; Vol. 502, c. 370-1.]
	The evidence from the Home Affairs Committee clearly shows that police forces around the country have, or are preparing to, cut the number of staff and officers. I am amazed that the Minister does not have an answer to that. Can he please tell us how this Government are planning on, as he claims, guaranteeing police officer numbers when we do not have any details on police budgets after 2011? Crucially, can he tell us how he defines front-line policing services, because those were the words that slipped into the Chancellor's pre-Budget report? If the Minister is defending that, what is the definition of front-line policing services? It cannot mean police strength because police authorities have already told the Home Affairs Committee that those numbers are being cut and will be cut. It is a total mystery to me what protecting front-line policing services means in that context.

Judy Mallaber: Derbyshire police have far more police officers and PCSOs than when I was elected in 1997, but we have continually argued that we should move more quickly towards where Derbyshire police should be compared with other authorities. They cannot do it too quickly because other authorities' budgets would be cut-that is the floors and ceilings argument. Is the Conservative party able to give me an assurance now that, if it were in power, Derbyshire would immediately go to its right level, without cutting other police services?

David Ruffley: I will come on to the point about floors later, so perhaps the hon. Lady will intervene again and I will answer her then, if she will forgive me.

Karen Buck: The hon. Gentleman did not mention in his list the largest police authority-that of London. What advice is he giving to his friend, the Mayor of London, whose draft budget includes a provision for a cut of 455 police officers? If we take into account the four budgets for which the Mayor will have been responsible, it works out at a net reduction in police officers by just over 100, I believe. This is taking place at a time when much is being made about the freezing of precept, so how does the hon. Gentleman advise the Mayor to proceed?

David Ruffley: Let us first make it clear and put on the record what the Minister is saying about defending police officer numbers. As I say, he talks about protecting front-line policing services, so will the Minister give us a definition of that when he concludes the debate?
	The plot thickens, because two newspapers today report that the Association of Chief Police Officers has drawn up proposals to cut 28,000 officers and replace them with civilian staff. Part of the leaked report, as reported this morning, says:
	As a result of a variety of approaches to modernisation, in the case of the most mixed forces there are over 50 per cent. staff. If all forces were to mirror that position... this would result in a more diverse workforce but with approximately 28,000 fewer officers and with savings in the region of £400 million.
	Will the Minister confirm that? Has he commissioned that work? Is he aware of it?

David Hanson: I can tell the hon. Gentleman that that document has no locus for the Government and it has not been commissioned by Government Ministers or the Home Office, and it does not have the support of ACPO. It is an explanatory document presenting options that have not been endorsed and are not being endorsed either by ACPO or the Government.

David Ruffley: May I take it that the Minister does not endorse that report, that he refutes it and that it will not be part of his policy?

David Hanson: Yes.

David Ruffley: He may not have the chance for it to become part of his policy in a few weeks' time, so that might be why he is so confident in making that assertion. Unfortunately, the Government's decision not to hold a comprehensive spending review that would detail proposed expenditure over a three-year period underscores that fact that they have no confidence in their rather woolly guarantees made in the pre-Budget report and repeated by the Minister today.
	Surely one of the key parts of policing-ensuring that we have their presence on the street-involves the amount of time officers spend on patrol. It would be fair to say that the figures on the amount of time police spend on the beat have fallen under this Administration. According to the Government's own latest figures, the amount of time a patrol officer spends on patrol has fallen from 19.1 per cent. in 2004-05 to an even lower 17.8 per cent. in 2007-08. Jan Berry, the Government's police bureaucracy tsar, when asked whether officers were spending more time on patrol now than two years ago said:
	If you talk to police officers they would say it has remained the same or got slightly worse,
	and she went on to point out, in what I take to be a real indictment, that only one of the 33 proposals to reduce bureaucracy in the final Flanagan review of February 2008, had been implemented.

Keith Vaz: I apologise for missing the beginning of the hon. Gentleman's speech and, of course, the Minister's. I was attending another engagement, as I shall explain later if I can catch Mr. Deputy Speaker's eye.
	Good practice is an issue raised in a number of Select Committee reports. If there is good practice in one area, it is important to ensure that it is translated into other areas. Should we look to organisations such as the National Policing Improvement Agency to ensure that this kind of efficiency is delivered to the Police Service, as in the end, that will also save a great deal of taxpayers' money?

David Ruffley: I am grateful to the right hon. Gentleman. We had a discussion about one bit of good practice-the four pilots for lighter and more nimble recording practice. I remember that when we discussed it in July, I asked the right hon. Gentleman how many forces had adopted this pilot of slimline recording, which was happening in the west midlands, Staffordshire, Surrey and Leicestershire, but he did not know. He said that I had asked a good question, but I thought it notable that he, the Chairman of the Home Affairs Committee, was unaware of how far this practice had been rolled out and adopted. I am sure that the Minister would agree that there is a need for some direction from the centre on certain issues. This provides one tangible example of bureaucracy reduction that has not been driven forward and has not delivered the gains that it could have. As the shadow Home Secretary has said, we intend to make this one of our priorities.
	Making better use of resources is at the heart of the grant settlement before us. All police authorities understand that they need to get more from less. Police authorities should be encouraged to find savings in back office and procurement, and release them for use on the front line. We all agree on that. Why, however, has the Minister not used the powers in the Policing and Crime Act 2009, which gave the Home Secretary powers to mandate collaboration on areas of procurement-both information technology and non-IT procurement-that could yield efficiency savings? Powers to mandate have been available for a few months now, so can the Minister tell us whether he is contemplating use of any of these mandated powers to squeeze more efficiencies out of the system? If not, why not? The Minister has cheerfully spoken about the prospects of another Labour Government and how 2010-11 will be all sweetness and light, but if he is going to make promises about spending, will he tell us what he intends about mandation and squeezing more bang for the buck?
	On the police grant formula, I have received many representations recently regarding the operation of police grant floors and I would like to raise one or two of them with the Minister. As written evidence to the Home Affairs Select Committee has highlighted, because of the operation of scaling and floors, forces such as Hampshire receive £1.5 million less than they should under the principal needs formula. Similarly, I have received extensive representations from Derbyshire police authority and constabulary, as due to the cost of providing floor protection within the funding formula, they lose out to the tune of £5 million a year. I could cite many other examples and I am sure that hon. Members from all parties could provide their own for me and the Minister.
	We welcomed the removal of the ceiling that the then Minister with responsibility for crime and policing announced in 2008. In that debate, the Minister said that
	we were able this year at least to announce a settlement that had no ceiling. Some progress has therefore been made towards the formula and I hope that, in the coming years, it will continue, if not accelerate somewhat.-[ Official Report, 4 February 2008; Vol. 471, c. 673.]
	Will the present Minister be more precise and give us an update from that statement of two years ago?
	It is quite clear that we need to move towards applying the needs-based formula more purely. There is a need for that to happen, and I think that all Members will see the sense of that. Sir Ronnie Flanagan, in his final report into the future of policing-it was essentially about bureaucracy, but he understood how resourcing impacted on that-said of grant floors that
	if we are to get the best performance return for our investment over the lean times ahead, we must start to deal with these anomalies.
	He went on to suggest:
	I think it prudent that, from that point on, there should be a staged relaxation of the 'floors and ceilings'-
	well, the ceilings bit has been dealt with-
	which dampen changes in allocations, possibly combined with special consideration for those few Forces which would face the most significant reductions in funding.
	The Home Affairs Committee confirmed that by saying:
	we support Sir Ronnie Flanagan's recommendation for full application of the police funding formula at the next Spending Review.
	We did not get the next spending review, because the Government funked that rather significant policy and political challenge. Today I give the Minister an opportunity to atone for the Government's sins, and to say All right, we did not carry out the CSR, but we will give some indication-an update on the statement given two years ago by his right hon. Friend the Member for Harrow, East (Mr. McNulty)-of the stage that we have reached in regard to the future of floors and the full application of the police funding formula.
	I look forward to the Minister's response. Given that he has been specific about some of what will allegedly happen to police strength in 2010-11, I think it important for him to be a bit more specific about the future of the floors that constitute the basis of the document before us.

Judy Mallaber: The hon. Gentleman invited me earlier to ask my question again when he reached this point in his speech. I am sure my constituents would be very interested to know how long it would take his party-if it unfortunately came to office-to restore the level of the grant funding formula that has been agreed, whether that could be done only at the expense of either other police services or some other budget elsewhere, and which budget might be affected.

David Ruffley: I think the hon. Lady is putting her question to the wrong person. I put the same question to the Minister when I asked him whether certain factors would be taken into account, as Sir Ronnie Flanagan had suggested, to prevent there being significant losers. The Minister should also tell us what stage he has reached in the review of the regime that he says he is conducting. The last statement that said anything was given to us two years ago, and it would be useful to have some specificity. I hope that when he has answered that question, the hon. Lady will be able to ask her own question again.
	The fire and rescue authorities' grant floors have been lowered for 2010-11. Has the Minister examined the impact that those significant future changes have had on the finances of different authorities, and does he think we can draw any lessons from them? He is the Minister in charge, and he is doing the technical work. We should like to hear about it.
	This country is in dire financial straits. Let us not forget that this Government, not any other Government, are responsible for the mess that we are in. We know why, and the British people know why. Given the additional pressures from the economic collapse over which the Government have presided and which the country is experiencing, police authorities-as they have told the Home Affairs Committee-already face projected cuts, and are now planning for cuts in police strength. Can the Minister please tell us why that is, and why it conflicts so obviously with the rosy picture of the grant settlement that he has painted here today? The two simply cannot be squared.
	There is also concern about funding formula changes. I think it incumbent on the Minister, in a debate on police grant, to tell us exactly what stage, in technical terms, the review of police funding arrangements has reached in the Home Office. I think that not only the House but the country deserves an answer to those two questions.

Tony McNulty: It is important for us to take the police, and police finance, extremely seriously. I do not think that that has happened of late, certainly on the Opposition Benches. I said two years ago-the hon. Member for Bury St. Edmunds (Mr. Ruffley) quoted me without mentioning me-that I believed that the time had come for a proper and substantial review of the way in which we funded our police. If we are serious about localism-which I do not think many Members are, on either side of the House-we have, in the funding of the police, the perfect model of what might be called transactional politics.
	Even as Police Minister I opposed the capping of police authorities-not local government-and I still do, because it offends against the localism to which I have referred. We saw that in London for the four years during which Ken Livingstone said, very clearly, I will put x per cent. on your per cent. precept, and this is what you will get for it in the end. You will get a team of six-one sergeant, two constables and three police community support officers-in every ward in London. I shall say more about London later. People bought that, and it was delivered. We thought that it was sacrosanct. I shall say more about that as well.
	I take on board what the hon. Member for Bury St. Edmunds said about the formula, and I welcome what my right hon. Friend the Minister has done in that regard, but in my opinion it is time for a fundamental rethink-locally based-of the funding of police forces. As I think I said from the Dispatch Box when I was a Minister, it cannot be right for the amount offered locally to the overall resource base of police forces to range from-I hope the House will forgive me for using old figures-some 18 per cent. in Northumbria to well over 55 per cent. in Surrey when the two areas are providing essentially the same service. It cannot be right that the precept at that time-again, I hope the House will forgive me for not using up-to-date figures-ranged from about £80 to the best part of £250 or £260 per head, or even more. Of course policing in Surrey is different from policing in Northumbria-if it were not, there would be a national police force-but such local vagaries should not obstruct the provision of a more universal and fairer system that is much more locally based in terms of contribution. I mean that in an entirely non-partisan sense.

Mark Todd: My right hon. Friend is making an adult speech on a difficult subject. Will he bring within his compass the issues of how the precept is determined and the role of capping? One worry is that when a local community is consulted widely on what would seem an appropriate precept which has gained a good deal of assent, as has happened in Derbyshire, the Government nevertheless intervene and impose an artificial cap on the precept that may be levied. Would it not be reasonable to recognise some freedom in that respect as well?

Tony McNulty: I am sorry that I did not make myself clear to my hon. Friend. As I may have said more gently when I was Police Minister but will say more vocally now, I do not consider that capping figures at all, or should figure, in my little purview or compass. We are talking about a unique relationship: a potentially transactional relationship. To say The police authority will do x with y increase in, for instance, capital or police numbers, and it will cost you, the public, y is pure transactionalism, and need not involve capping.

Humfrey Malins: I am grateful to the right hon. Gentleman-who, if I may say so, was a very good Minister-for mentioning Surrey. As he will know, Surrey taxpayers contribute up to 50 per cent. of policing costs. That is a terribly high percentage, and capping caused those taxpayers a great deal of difficulty. Unless I misunderstood the right hon. Gentleman, he seemed to be showing some sympathy for Surrey. I only hope that his right hon. Friend the Minister will accept words from him that he might not accept from me.

Tony McNulty: Of course the hon. Gentleman may say what he said about what I was like as a Minister.
	I am talking about where we need to go, rather than about the existing circumstances. To be fair to myself-if that is possible-I think that I said much of this from the Dispatch Box during the debate that was mentioned earlier. I believe that there needs to be a collective will and consensus.
	As I said earlier, there needs to be some seriousness in the debate about police grant and resources, and all the issues that surround that subject, if we are to do right by the public. Let me give an example that is relevant to resources. Back in 2005 we decided, rightly, that there were serious problems with the data relating to violent crime. We consulted widely on that, and a cross-party panel looked at the detail and arrived at some conclusions. The upshot was, in essence, that it was thought that the way in which violent crime data are assessed and collected should be changed so that, instead of having just the standard police definitions, the victim's own thoughts on the level of the violence of the crime were at least taken into account. We therefore changed those definitions, which I think was rather brave, although we could perhaps have gone further.
	As a result, all subsequent data on violent crime are substantively different, and that, of course, has implications for the measurement of the performance of police forces. It is, therefore, frankly not on for the boss of the hon. Member for Bury St. Edmunds-the hon. Member for Epsom and Ewell (Chris Grayling)-to compare the new violent crime figures with the old ones, and to do so in such a distorted and disingenuous fashion. I was going to say mendacious, but I suspect that that word is on the list of non-parliamentary language. This airbrushing of statistics does the hon. Gentleman and his party no credit, and, more importantly, it serves to distract from the reality the Government were trying to get through to by changing the statistics in the first place.

Judy Mallaber: Is my right hon. Friend aware that our chief constable in Derbyshire has in the past had to disavow newsletters put out by the Conservative party, because they included misleading crime statistics? Does my right hon. Friend also share my concern that the police feel that they are forced into such a position? They should not be put in such positions, because nobody should play around with crime statistics. Indeed, our chief constable has begged for games not be played with statistics.

Tony McNulty: That is absolutely and entirely right, and it is to the Conservatives' shame that they have played around with the statistics. It is not enough for the hon. Member for Epsom and Ewell to say, as he did on the Today programme this morning:
	There are certainly changes in the reporting methods.
	Well, I am not sure whether I should congratulate him on spotting that, because the changes have been quite significant. He continued by saying that
	the point is that they are the only comparators available.
	That is nonsense. Comparing the previous figures with the current figures is like comparing apples with oranges. If the upshot of the changes was that we had somehow, through sleight of hand, hidden the extent of violent crime, I could understand the hon. Gentleman's point, but violent crime rose by 35 per cent. because of the adjustments, as-it is to be hoped-we were now measuring it in a far more accurate and victim-centred way. The Government, and all political parties, should be given great credit when they use such data in public forums.

Stewart Jackson: I was just beginning to warm to the right hon. Gentleman in his role as bipartisan statesman speaking for all of us when, in the past few minutes, he started to become over-partisan. To revert to the bipartisan tone, does he agree that the floors and ceilings mechanism is a very blunt instrument that fails to take into account-I am sure he will concede that it failed to do so when he was Police Minister, as well as now-specific issues such as population change, the recording of population numbers and, particularly in Cambridgeshire, tourism? We need to go back to square one in reviewing the funding formula, because not all of the 40-odd force areas can possibly be the same in key aspects such as urban population and rurality. I invite him to conclude that this Government have not looked at that pressing issue with the appropriate alacrity.

Tony McNulty: On the first part of that intervention, the hon. Gentleman misses the point entirely. I am not trying to be partisan. As I have said, the criteria for the figures were determined by a cross-party panel, and we deliberately changed the entire definition of violent crime. Given that there was broad agreement on that, it is incumbent upon all of us to use the new figures appropriately and not to compare them with the previous figures-and nor, frankly, to shroud-wave and scaremonger to the public in the disgraceful way that the hon. Member for Epsom and Ewell has done.
	The other points that the hon. Member for Peterborough (Mr. Jackson) made were precisely the points that I was making. When I was Police Minister, I clearly did not succeed in everything I did. If I had, the formula would not be quite as it currently is and more of the contribution would be local. Although, of course, we will never reach the stage when the entire police budget comes from local sources, because of the transactional nature of policing and police authorities, we have to move to a system beyond the current formula.
	The hon. Gentleman is also wrong on another point; the needs-based formula we have is far more responsive to the factors he mentioned than the system prior to 1997. I agree, however, with his broader point about the Government in general not responding to changes on the ground as quickly as they might-and that will not change if, heaven forbid, the colour of the Government changes-and about how that links in with various formulae allocations not being as they should be. That is in part because the creaky old Whitehall machinery is not responsive enough to the massive and almost instant changes that are happening in Peterborough and elsewhere; changes that used to take five or 10 years to happen fully now happen in three or six months.

Brian Binley: I congratulate the right hon. Gentleman on making such sensible arguments about formula funding, but he talked about the needs-based formula and the truth is that that formula is still too crude. I hope that he will at least go along with me on that. In Northamptonshire, we are simply not getting the money that the needs-based formula suggests we need.

Tony McNulty: I accept that, and the hon. Gentleman is, in a different way, putting the point about floors and ceilings again. However, considerable progress has been made over the past 10 to 13 years in the allocation of resources and in trying to reflect the needs of local areas. I think we should go further on that, of course, and we could, and should, do that on a cross-party basis in future.
	Whatever the difficulties in terms of police authorities, the Opposition are in a state of confusion about the notion of having elected police commissioners. If that were in place now, we would be in considerable difficulty, because, effectively, the person whom the hon. Member for Epsom and Ewell has ordained as the role model for elected police commissioners has just walked off the pitch. The Mayor of London has just said, I don't like this any more. It is too tough. I cannot be bothered being chair of the Metropolitan Police Authority. He said in his manifesto, no less- [Interruption.] I would like Members to listen to this, and I apologise for being metro-centric, but that is just the way I am.  [Interruption.] I said metro-centric, not metro something else. In his manifesto, the future Mayor said:
	It is important for the Mayor to take a public lead, so I will chair the Metropolitan Police Authority. I will take personal responsibility. No offence will be too trivial to demand my attention. No challenge will be so big that I shrug my shoulders and pass the buck.
	What has he done just last week, however? He has shrugged his shoulders, passed the buck, and said to himself, I know what I'll do; as £140,000 is not enough, I will write another column for  The Daily Telegraph for £250,000. He can afford the time to do that, therefore. In the same week that he gave up the chairmanship of the MPA, he also said, Think green, vote blue and I can't be bothered with the London waste authority either. The chairmanship of that is in the Mayor's gift, but he cannot be bothered to do that either.
	The hon. Member for Epsom and Ewell needs to think about this idea of having elected police commissioners. It is terribly badly thought through, and he has managed to do something I could not do in two and a half years in ministerial office: unite the police world against him. The idea must be wrong in some aspects, therefore. I fully accept and concede that when I was a Home Office Minister, we discussed these issues and agreed that there was something lacking in terms of accountability, but elected police commissioners are not the way to address that. That is a mad idea.
	I have said in a London context that there must be some way in which local councils can more readily hold to account their borough commander for local policing, and that that is not captured through the MPA structures. That issue is complicated in London because the Met does so much nationally as well. We were also told by the Mayor that he would spend less on press officers and redirect more resources to front-line policing. How many fewer press officers are there now than when Mr. Johnson came into office? What is the difference between his quota of press officers and Ken Livingstone's? None; the number has not changed at all. Someone who does the counting right might be able to say that Mr. Johnson has saved 0.5 of a press officer post and that is it. We were told in fluid style during the campaign that he would cut the number of press officers and that that would fund four new rape crisis centres, which, as the police and everybody fully accept, are needed. Have they happened? No. We have one such centre-some might say that we have one and a half, but barely so-and by the end of his term two will be completed. Promises that were made barely two years ago have not been delivered, to the consequence of London. In this context, the only new money-additional money-that London will get this year is the 2.7 per cent. for the next two years that the Minister announced among other things today.

Karen Buck: Does my right hon. Friend also recall the pledges made about the young Londoners fund, the youth charity and the colleges and training for young people that were supposed to be set up as part of the drive to tackle gang violence and youth crime? Can he shed any light on what has happened to any of those commitments over the past two years?

Tony McNulty: We could look and shed as much light as we want, but we would find that the answer is nothing, even if we throw in the Mayor's fund and all sorts of things. The crucial thing given London's unique structures-the unique structures that the police authority introduced in London and that Mr. Johnson took over two years ago-is that we were told that London was the crucible. Someone who wanted to see how a future Conservative Government would work in this country was told to look to London. People in London are doing so, which is why, irrespective of whether the count is done on Thursday night or Friday night, Conservative Members might wish to look with interest at how some of the London results go.
	Policing is far too important for what the Mayor is doing. There are to be 455 fewer police officers over the next three years, despite his promise that there would be more and that tackling crime was to be central to all that he does. He promised that he would spend more on the police, but for the first time since the inception of the Greater London authority, this year and next year the police budget will decrease. It would decrease by significantly more if it were not for the generosity of the Minister. The only two times that there have been cuts in the level of council tax for police services since the beginning of the GLA are the two years of Boris Johnson, and that is not good enough. He also said, as part of his anti-bureaucratic sway, that the Metropolitan Police Service was fat on reserves and that he would strip out the reserves to the bare minimum and spend the money on front-line policing or in other ways-I believe he cited 26,000 hand-held scanners in his manifesto. However, the MPS reserves, which are preciously needed given the way he is starving them, have increased, rather than otherwise. Again, that is to his shame. Why does that matter? It matters because in each of London's 32 boroughs policing is central to the welfare and security of each of our local communities. Harrow is a relatively safe borough; there has been an excellent roll-out of safer neighbourhood policing and its police are under the excellent leadership of Chief-Superintendent Dal Babu, who is doing a very good job.

David Hanson: I am interested in how these facts are coming about, given that we are providing an extra £49.4 million to London next year.

Tony McNulty: Because Boris Johnson is not; because crucially, Ken clearly said to the electorate during his four years, I am increasing the police precept for London by x and here is what you are going to get for it in terms of safer neighbourhood teams. Boris has said to people-again this is typical flim-flam-that he is going to freeze the GLA precept, but he has told them nothing about the consequences of that, especially for the Metropolitan police. My right hon. Friend rightly points out that the only moneys that Harrow and elsewhere in London are getting that are new in any way, shape or form are coming from central Government and the settlement that we are discussing today, which the hon. Member for Bury St. Edmunds so blithely dismisses in the same way as he done for the past three and a half years-it could have been the same speech.
	This matters, especially in respect of capital, because my right hon. Friend is announcing significant millions more in capital for London. Boris intimated, at least when he was in campaign mode, that the new police station that Harrow needs, as opposed to what it has in south Harrow, will be built. That proposal has been scrapped. Any notion of significant growth in the capital spend for London has been scrapped, and that matters throughout London, because if the custody suites are not in the right place, more policemen and women are driving around London looking for somewhere to put the people that they have in the back of their cars. It matters, in terms of rolling out safer neighbourhood teams properly, that they have a base out in the communities, rather than in Fort Apache style police stations.
	I really fear a mix involving playing politics on the data-shame on the hon. Member for Epsom and Ewell, who is at it yet again. As I said the last time I was on my feet in this House, I would not get a route map to the Home Office if I were him, because I do not think he is going to end up there, even in the stark, worrying times that would arrive if the Conservative party got into power. This matters because when someone plays politics with police resources and policing policy, they play politics with people's lives in a way that is unforgivable. It is easy to get on a soap box and scare people. I say very clearly that Harrow is one of the safest boroughs in London, not least because of the investment that has been made during the past 10 to 13 years and because of what Ken Livingstone did as Mayor on rolling out safer neighbourhood teams. I want it to stay that way.
	My biggest fear is that through Boris Johnson's rank incompetence, the Metropolitan police will, because such a large budget is involved, have to start to make cuts by picking into either the specialist squads to tackle fraud, rape and a series of other very important pan-London issues or the safer neighbourhood teams. If the lasting legacy of Boris Johnson's mayoralty is the unpicking of the settlement on safer neighbourhood teams throughout London, that would be to his shame. We have made significant progress on policing in London, and nationwide. For that to continue, the hon. Member for Bury St. Edmunds needs to get off the soap box and join a cross-party initiative to put policing at the centre of what our politics-rather than our partisan politics- is about.

Paul Holmes: As we have heard, this is the third year of a three-year settlement and, as such, it holds no surprises. The Government deserve congratulating on the introduction of the three-year process, which applies across all sorts of areas, not just to policing. It makes budgeting for local authorities, schools, hospitals and all sorts of organisations far more effective than the old 12-month, short-termism that meant that no effective planning could be done. It has been a step forward.
	Given that this is the third year of the settlement and there are no surprises, much of what we said in the debates on the police grant report last year and the year before still stands; having looked back on those two debates, it appears to me that we said the same thing almost word for word. Most of it does not need repeating, but some of it does. This three-year settlement was the tightest for a decade, but it was still quite reasonable. The great fear now is about what will happen for the next three year period-2011 to 2014. The pre-Budget report estimated a 0.8 per cent. fall in funding for the police from 2011 to 2014, but that is entirely unbelievable. Sir Hugh Orde, the president of the Association of Chief Police Officers, has said:
	I can confidently predict cuts in police budgets of 10 to 20 per cent. over the next few years.
	That is probably a much more realistic figure. Interestingly, two university vice-chancellors from my region said at a meeting in this place last night that they had been told by contacts in the Treasury to expect similar cuts in their university budgets. The pre-Budget report estimates a 0.8 per cent. cut in the next three years, whereas Sir Hugh Orde much more realistically estimates a cut of between 10 and 20 per cent.
	Such a cut will occur at a time when the police numbers are starting to fall. Figures published this week showed that in six out of 10 police forces numbers, which had reached a record high, were starting to drift downwards; ACPO notes that many forces are already freezing posts in anticipation of what is to come next year and in subsequent years. Today's edition of  The Independent contained a report on precisely this in which it said that it has
	learnt that about 2,000 would-be officers were recruited by the Metropolitan Police during...January 2009 and told that they would start their training in spring last year.
	Now, despite passing exams and interviews, the successful candidates have received letters informing them that they will not be offered a start date until 2011 at the earliest-almost two years later than they were led to believe.
	That is happening across England and Wales.
	For example, in Gloucestershire nearly 100 candidates who were recruited have been told that it has been deferred until 2011, possibly later. Similarly, 240 candidates for the West Midlands police have gone through all the stages of the recruitment process only to be told recently that their recruitment has been deferred. Cleveland police had 102 successful recruits treated in exactly the same way, and Cumbria had 59 so treated. That same practice has also happened in Greater Manchester and Hampshire-it is happening across the country. Fears about what cuts are to come are already having an effect, in that police forces are freezing and postponing recruitment. As I have said, numbers are already falling in six out of 10 forces.
	Such cuts, should they snowball and continue in the next year or two, will be a tragedy. The Association of Police Authorities said of this grant:
	The provision of effective adequately resourced policing is one of the Government's primary responsibilities in a developed civil society.
	In the past few years, such provision has been used to very good effect in the redevelopment of neighbourhood policing, or beat policing as it used to be called. In the 1980s and 1990s, the Conservatives in government slashed police numbers, and one of their defences was that beat police were old-fashioned and out of date, that they did not work, that they were ineffective, that they did not stop crime and that they did not catch criminals-so it did not matter that police numbers were being hit so drastically.
	At the very first, when this new Labour Administration came in in 1997, they deployed the same argument for a brief period. They quickly came round to accept, however, that neighbourhood policing is one of the most effective forms of policing. Of course, we have the headline policing issues, such as terrorism, serious crime, bank robberies and so on, but, as the chief constable of Derbyshire-the one who has retired, not the one who is in office now-said some years ago, when he looked at the figures every year, of all the issues and complaints that people in Derbyshire raised, serious crime accounted for only a tiny percentage of them. In their day-to-day lives, people were complaining about, fearful and being bothered by the issues that are relatively low level-vandalism, antisocial behaviour, car theft, burglaries and local drug dealing-when compared with issues such as terrorism.

David Hanson: I am grateful to the hon. Gentleman for giving way. He will know that the settlement before the House gives an increase of £259 million to police forces for 2010-11 over that in 2009-10. To help frame the debate, will he tell me how much more than that £259 million the Liberal Democrats believe we should give to police forces next year?

Paul Holmes: The Liberal Democrats have clearly said that we would divert money by abandoning particular Government programmes-identity cards have been a long-standing option. At one time, based on the original grandiose costings for ID cards, that would have paid for up to 10,000 extra police. Now the figure is about 3,000. That answer has been given and published before.
	After a short interim period back in 1997, the Government accepted that neighbourhood policing was effective and one of the No. 1 issues that the population of this country is concerned about-it still is to this day. The expansion of neighbourhood policing beat teams has been very effective. We should remember, however, that some of the glowing headlines that Ministers often tell us about are not the same all over the country. We have heard about the situation in London where, because of the combination of a London system that can raise the police precept without its being capped by the Government and can put that money into the police force along with the receipt of money from the Government-this is a situation that we often hear boasted about-every local authority ward will have a neighbourhood team of six, made up of a combination of officers and police community support officers. That is very effective-I see it, living in London as I do for three or three and a half days a week when Parliament is in Session. However, that is not true in the bulk of the country.
	Many hon. Members would make that point. For example, my hon. Friend the Member for Cheadle (Mark Hunter) has long campaigned on the fact that his area, Stockport, and Greater Manchester in general cannot remotely approach the levels of neighbourhood policing that we see in the London wards. My hon. Friend the Member for Bristol, West (Stephen Williams) has long campaigned on the fact that Bristol, compared with other comparable cities, has one of the lowest ratios of police officers for neighbourhood policing and for all kinds of policing. There are huge disparities. Exactly the same is true of Chesterfield and Derbyshire-those aspirations of six officers dedicated to a team for each local government ward are a pipe dream in many parts of the country. If that is the situation that we have reached at the peak of success and investment, what is going to happen as things start to get worse?
	Only two weeks ago, I was talking to the beat team in an area called Loundsley Green in my constituency. One of the police officers had been assigned to such things as the police response cars for 17 years and had now switched to beat policing and neighbourhood policing. He said that it was by far the most successful and rewarding part of police work in which he had ever taken part. Instead of rushing to one emergency and spending as little time as possible there before rushing off in the car to the next and then to the next, he was able to get to grips with local issues and to follow up local miscreants. He was able to get to know them, their parents and the people involved and to follow their cases up effectively over a period of time. He could really feel that he was making a huge difference to policing, community safety and community consciousness in that area. It would be a great shame to see that undermined in years to come, but that is the danger.
	If police numbers are at a high and are just starting to fall from that high, is there a danger that they could start to plummet very quickly? The chief constable of Bedfordshire has pointed out that police numbers depend not so much on the core police grant, for which we get funding for the three-year rolling cycle that we are discussing today, but on special grant funded allocations. That is the case for PCSOs, in general, but it also applies to all sorts of policing.
	The special grant funded allocations are just the sort of thing on which the plug could be pulled next year, the year after or the year after that. A Government could boast that they were maintaining core funding, with little change, but could pull the plug on the special grant funded allocations. We would then see a drastic reduction in police numbers.

Tony McNulty: I thank the hon. Gentleman for giving way. I am not clear about this point. Have the Liberal Democrats said in terms whether they would commit to the neighbourhood police fund-the fund that supports the 14,000 PCSOs-or whether they would un-ring-fence it? I meant to try to ask the hon. Member for Bury St. Edmunds (Mr. Ruffley) that-I believe that the Conservative line is that they will un-ring-fence that money, with all that means for neighbourhood policing. Have the Liberal Democrats come to a settled view on that yet?

Paul Holmes: We would have to ask our gurus, such as my hon. Friend the Member for Twickenham (Dr. Cable), about that specific point. In the long-term, following exactly the theme that the right hon. Member for Harrow, East (Mr. McNulty) was talking about earlier, we would look to transfer most of the control and funding of and fundraising through local precepts for policing to local communities. It would be their decision, along with duly elected police authorities, what to do with that, how to do that and what the priorities were. As was correctly pointed out by the right hon. Gentleman earlier, the policing requirements in an area of inner London can be very different from those in a rural area, a shire area, a small town such as Chesterfield and so on.
	If the special grant funded allocations were to be withdrawn in years to come, we would see a dramatic drop in police numbers, even though core funding was, on the face of it, being maintained. As the chief constable of Manchester has pointed out, one cannot rely, as people sometimes suggest, on special constables. They do a fantastic job-I have been out many times with special constables in Chesterfield-but, as the chief constable of Manchester pointed out, they are volunteers. Special constables cannot be ordered to be on duty on a certain day or evening at a certain time. They can be asked or persuaded and both they and their goodwill can be relied on, but they cannot be ordered. We cannot guarantee policing on that basis. They are a fantastic supplement to what the police do and what they provide, but they are no alternative and they are certainly not a free, cheap and easy alternative. We must consider how we will maintain numbers in the future.
	One of the alarming factors underneath what looks like a relatively rosy picture is the fact that police numbers in forces around the country have been maintained through the use of dwindling reserves. That has certainly been true in Derbyshire. Derbyshire has features of its own that have been mentioned and to which I shall return, but over the past few years it has considerably run down its reserves in order to maintain and expand police numbers because of the lack of appropriate funding from central Government and because of the threat of council tax capping, which has stopped it using that option to fund police numbers. However, reserves can only be used for so long before they have gone. Quite a number of police forces tell us that they are approaching the point at which they will no longer be able to dip into reserves to plug those manning gaps. Again, we could be approaching the edge of a precipice if special grants disappear and reserves are running out. If we do not have the alternative that the right hon. Member for Harrow, East rightly discussed in considerable detail, and if we maintain the capping regime whereby the Government tell local authorities and, as in this case, police authorities, that they can increase their precept only by a specified amount, or not at all-there are suggestions that council tax might be entirely frozen for a while in the future, which means that there will be cuts-where will the police and local communities turn to? Will police numbers and the services that the police provide simply drop dramatically?
	As a few hon. Members have already pointed out, surveys by MORI and other organisations have all come up with the same message-local people would be willing to pay 10 to 30 per cent more on their police precept if they could see a direct link between that money and local policing. A lengthy, in-depth consultation by Derbyshire police authority over two or three years reached a similar conclusion. People do not want that money to go to someone in London who will then hand it back out in grants that may or may not come back to Derbyshire, for example. They want it to go to their police authority to spend on policing the streets in their towns and villages, but the Government say that they will not allow that to happen and they have capped authorities. We heard about capping earlier. In Derbyshire, last year, there was not an outright cap but what happened was effectively the same. The Government said, We are not going to cap you and make you re-bill, but we will reduce your grant by the amount that you raised by increasing the precept by more than we thought that you should. So, this year that police authority is faced with an effective cap, even though it has been given a different name.
	We are told that efficiency savings are the new solution. Back in the 1980s and 1990s, the Conservative Government used efficiency savings as a euphemism for the massive cuts that they imposed in most sectors, including policing and education, in which I worked. We must conclude that this Government's use of the same term will amount to much the same thing. Several points need to be made about that. First, if one says that there are large efficiency savings to be made in the way that our police authorities should be run in the next year or two, it implies that there is a lot of waste-a lot of fat or flab-in the system that could be removed, so that that money could be spent on proper policing. I cannot speak for other police forces, but I know that that is not true of the Derbyshire police, who have had to make as many efficiency savings as possible in the past few years because of Government underfunding. There are few efficiency gains left to be made in that force, so the idea that there is a lot of flab to be cut so that money can be recycled is a dangerous one, especially given that police authorities cumulatively have made £2 billion-worth of efficiency savings in the past 10 years. How much more can they do?

Tony McNulty: I take those points in part, but does the hon. Gentleman recognise that the five east midlands police authorities and forces have collaborated significantly since the denouement of the merger debate? The efficiency savings that they are making are real, and that money is being transferred to the front line.

Paul Holmes: Yes, the authorities have made great steps forward in that regard. Some criticisms have been levelled about police forces not collaborating, but the Derbyshire police authority always says that that is not true of the east midlands forces, and points to what successful collaboration there has been. It is also looking at further collaboration, so there are things that can be done. However, if £2 billion-worth of cumulative efficiency savings have already been made across police authorities- percentage-wise, the saving in Derbyshire will have been higher than in other areas because it has had to make savings as a result of being underfunded by £5 million a year-how much more flab can be cut? How many more resources can be redirected into front-line policing? Given that 88 per cent. of police budgets are staffing costs, a demand for more and more efficiency savings must mean much more civilianisation, which has already gone on apace. How much further can authorities go without taking real police off the streets? Alternatively, efficiency savings will mean a loss of uniformed officer numbers, so the phrase efficiency savings is a euphemism for cuts.

Brian Binley: Will the hon. Gentleman take into account that it is estimated that in the east midlands we have lost £60 million in the past three years as a result of the damping arrangements and other such measures? That is the equivalent of 600 police officers.

Paul Holmes: Absolutely. In Derbyshire alone, the loss is equivalent to 160 police officers. If we add the losses across the east midlands, we arrive at the figure that the hon. Gentleman has just given. I will return to my slightly more parochial take on Derbyshire and the east midlands shortly.
	I am interested in hearing the Minister's comments on a different issue that has partly been touched on today, which was also raised last year and the year before. Some police authorities are very badly hit by rapid population movements such as migration and changes due to migrant labour. For example, 1 million Poles-10 times the estimated number-came over, as did many people from other groups. Such movements can hit certain areas particularly badly in all sorts of ways, such as the requirement to fund the cost of using translators in courts and police stations. The Government have just had to admit, in the past few days, that those costs are much higher than they had previously stated in their answers to parliamentary questions. When this issue was raised in 2008, the then Minister with responsibility for policing, the hon. Member for Harrow, East-

Tony McNulty: Right hon.

Paul Holmes: Sorry. The right hon. Member for Harrow, East said that it was a very good point and that we should look into it. When the same issue was raised last year, the then Policing Minister-now the Minister for Schools and Learners, the hon. Member for Gedling (Mr. Coaker)-said exactly the same thing. I wonder whether the current Minister for Policing, Crime and Counter-Terrorism, the right hon. Member for Delyn (Mr. Hanson), will now, three years on, not only say that that is a good point and that we should look at it, but exactly what concrete action is being taken to address the matter. Police authorities cannot wait for five or 10 years for Government statistics to catch up. Education and health authorities have the same problem when there are rapid influxes and sometimes egresses of population, particularly of migrant workers, as with the large number of Poles.
	Let me ask a specific question. Appendix A of the report says that the population figures used to calculate police grants are
	those available to the Secretary of State on 1 October 2007.
	It talks about calculating the projected population for 2010 by using figures from the Registrar General that were published on 27 September 2007, whereas for Welsh authority areas, the projected total resident population has been estimated using Welsh figures. A big argument regarding local authorities and funding is the fact that projections are often based on figures from the previous census, the last of which was nine years ago in 2001. Is appendix A suggesting that the calculations for police grants are made using more up-to-date estimates, calculations or projections? How exactly are those figures arrived at, and are they more up to date than the projections used generally for local authority formulae calculations? If they are better and more up to date, that would be of great interest to old colleagues of mine who get involved in local government funding issues, which tend to be based on census figures.
	Let me discuss what is a slightly more parochial issue for me as a Derbyshire MP. We have already had one example about the east midlands receiving, because of formula funding, caps, floors and ceilings, the fourth-lowest level of Government funding for policing out of nine English regions. That is happened because of relatively low Government grants and the below-average base of council tax in relation to income. For example, there is a greater proportion of properties in the lower council tax band in the east midlands, so any council tax precept increase brings in much less than a similar increase in more affluent areas. In 2006, the Government said yes to the full implementation of the police grant formula in the east midlands. The figures were wrong and the F40 campaign was right after all those years. The formula was reworked, and the new formula, from 2006, said that the east midlands should have had an extra £19 million. Given that the east midlands police authorities collectively say that to meet the policing needs that they and the Government assess are required now, this year, they need an extra £22 million, that £19 million virtually closes the gap. There is a huge gap between what the police authorities say is required to meet policing needs in relation to risk, what the Government say that they should have in funding and what the Government will give them. In that regard, the Derbyshire force is losing £5 million a year, so, for the Government to say, Yes, you need this money, but, no, you can't have it, seems outrageous. We have heard some eloquent comments on that issue from a former policing Minister, the right hon. Member for Harrow, East, but it is a shame that he could not implement those ideas two years ago, when he was in office. Derbyshire's underfunding of £5 million a year is equivalent to 160 officers and more than 200 PCSOs. Derbyshire has the lowest level of PCSO funding per head of population of all forces in the country.
	Earlier, the hon. Member for Amber Valley (Judy Mallaber), who is not in her place any more, said that Derbyshire's police numbers had risen considerably in the time that she had been a Member of Parliament. However, in the five years between September 2004 and September 2009, in an area with one of the lowest numbers of police officers per head of population in the country, the rise in police numbers was exactly 29. That is not a great tribute to the Government's actions in redressing the unfair funding given to Derbyshire compared to similar police authorities.

David Hanson: The rise might be 29 in that period, but Derbyshire has got 285 more officers in the 12 years since March 1997.

Paul Holmes: That rise is still one of the lowest, per head of population, in the entire country.
	Finally, the Derbyshire police authority wrote to the Government on 6 January about the police grant report that we are debating today. It said:
	We are disappointed that the final year of the three year grant settlement has not been used to move swiftly to full implementation of the new formula grant settlement, introduced five years ago.
	It is still not fully implemented. The letter went on:
	The grant floor continues to peg back the grant increase for Derbyshire Police Authority.
	For Derbyshire, this means that the Authority has lost out on funding of...£26 million in the five years since the new formula was introduced. We appreciate that full implementation in one year would have been unduly harsh on authorities that stood to lose grant. Nevertheless, we believe that the three-year settlement provided an ideal opportunity to move to full implementation of the formula, in a phased way that would have enabled those authorities to plan for a reduction in their grant.
	Derbyshire is in a bad position that has not really improved. The future for all police authorities is, of course, looking grimmer but I hope that whoever is making these decisions in a few weeks or months will consider regions such as the east midlands and police authorities such as Derbyshire. If cuts have to be made, I hope that they will redress the balance, with areas such as Derbyshire, which is already so far behind, suffering fewer cuts than better funded areas.
	It is unacceptable for the Government to say, Yes, you need £5 million a year more if you are to provide the policing that's needed and, yes, we're going to inspect and judge you as though you'd got that money-but no, you can't have it.

Keith Vaz: I am happy to support a fellow east midlands Member of Parliament in asking for more. One of the features of debates like this is that right hon. and hon. Members on both sides of the House press the Police Minister for more resources for their area. In the end, we will all be judged, when we face the electorate, by whether we take the issue of crime seriously and whether we have used the resources that we have been given to deal with the causes of crime, and crime itself, in the five years since the last election.
	The Minister is probably fed up with my voice, as he was with the Select Committee on Home Affairs this morning as we concluded our inquiry into crime prevention. The former Prime Minister Tony Blair talked about the Government being tough on crime and tough on the causes of crime. The Minister came with the very good news that crime has fallen since he has been in his post, and that is obviously something to celebrate. The police budget has increased, as hon. Members on both sides of the House must accept. However, it is important to look at the causes of crime, and we hope to conclude our report on that subject before the general election is called.
	I want to apologise to the House for missing the opening statement made by my right hon. Friend the Minister, but the wonderful new technology of the BlackBerry, which we have suggested should be given to every police officer, meant that I was kept informed of everything that he said. I was waiting to see the Prime Minister to discuss the important issue of Yemen, and the Prime Minister's diary and commitments on Northern Ireland meant that the meeting kept getting put back. That is why I missed the start of the debate, for which I am sorry, although I was present to hear the Opposition spokesman, the hon. Member for Bury St. Edmunds (Mr. Ruffley), talk about the Conservative party's policy in this area.
	I thought that we could reach a consensus on police numbers, certainly after the Select Committee decided to conclude its unanimous report on police service strength. I see that two other members of the Committee-my hon. Friend the Member for Walsall, North (Mr. Winnick) and the hon. Member for South-West Devon (Mr. Streeter)-are in their places. We were being lobbied hard by police authorities and others: some said that they would have to cut numbers, while others said that they were happy with what they had been given. Some authorities said that they had not had enough funding over the past 12 years. The hon. Member for Chesterfield (Paul Holmes) reminded us that the east midlands had done worse than any other region, and asked us to look at that. We therefore decided to have a dispassionate look at numbers.
	We published our report a couple of weeks ago, and the key facts are in it. We found that the Government were right to say that there had been a real-terms increase of 19 per cent. in central funding for the police since 1997-98, and that there had been an increase of 4.8 per cent. in the number of officers, and a rise of 15.5 per cent. in police support staff. However, we found that was a decline in the number of visible police officers in 13 of the 43 police authorities. Although we can agree that the amount of money being made available has gone up, the worry on both sides of the House has to do with what is going to happen in the future.
	I obviously hope that the Labour party will take office after the general election, but it could be the Liberal Democrats or the Conservatives. Whichever party it is, though, it will face the difficulty that a declining amount of resources will be dedicated to the police service. One can wait for ages for a Police Minister to come along, but we have heard from two already today. It is possible that there are two future Police Ministers on the Opposition Benches. Because 88 per cent. of the police budget is to do with the work force, I and my Committee believe that every Police Minister will have to face the prospect of financial restraint.
	I hope that all hon. Members will read our report, because it suggests alternatives to cutting the budget. We looked at the involvement of the private sector, and we talked about how the public sector could be more efficient. We also raised the issue of voluntary mergers: although we do not say that they should be compulsory, we in the east midlands have already seen collaboration between the forces of Northamptonshire, Leicestershire, Lincolnshire, Derbyshire and Nottinghamshire. That is an option and a scenario that could be pursued.

Paul Truswell: My right hon. Friend is talking about other ways for police forces and authorities to raise revenue. Did his Committee look at the possibility of giving police authorities greater powers to raise the full cost of policing major events such as music festivals and large sporting fixtures?

Keith Vaz: Yes, we did. Although we did not specify music festivals in particular, that is one of the last recommendations in the report. We said that police authorities, with the assistance of local stakeholders, should be able to raise the money that they need if local people agree that that should happen.
	Of course we were worried about the cap, as Leicestershire is one the authorities that is to be capped. I was one of the all-party group of the county's MPs that went to ask Ministers not to cap Leicestershire, on the grounds that the county's police need the resources to deal with the work that has been put before them. We accept that funding has increased, because that is a fact, but Ministers have also posed new challenges to local police forces. The amount of legislation that has emerged from this House and the challenges facing local police officers mean that they have to spend more time doing what the Government ask.
	The current Police Minister was not in post when the Labour Government came to power. In fact, I cannot remember who the first one was, but the Government have been elected three times now and there will be things that the police were asked to do in 1997 that they are now being asked not to do any more. That is why we welcome the appointment of Jan Berry. We welcomed her report, but we want it to be implemented. What she says is not that much different from what Sir Ronnie Flanagan said in his report, or from what we said in our report Policing in the 21st Century-that is, that there should be less bureaucracy and more technology. We should cut red tape and make sure that police officers are on the front line and that they are visible.
	I raised with the Minister the case of Staffordshire, as I always do. I saw very good practice in Staffordshire- 24 pieces of paper reduced to one. I asked the previous Home Secretary whether that could be done all over the country. She said that the Government would look into it. I asked the current Home Secretary and the Police Minister. They said that the Staffordshire experience is being rolled out all over the country. It is a while since I was in government, so I am not quite sure what rolled out means. Does it mean that rolling out will take several weeks, months and years, or does it mean a Home Secretary telling police forces, You will do this. We think this is a good idea because it saves money in Staffordshire, so you will save money in Lincolnshire or in Northamptonshire?
	I know that the last time I raised the matter when the Minister was on the Front Bench he nodded and said that it was being rolled out in Staffordshire, so let us see when he replies how many police authorities have done what Staffordshire has done, rather than waiting for the great roll-out process, which I am sure is happening. It would be helpful for the House to have some facts.
	What I say to the Minister is yes, we need to look at innovative ideas. The hon. Member for Bury St. Edmunds has, of course, had many debates and discussions with me and with the Committee on these matters, and the shadow Home Secretary gave evidence to the Committee this morning about what the Conservative party would do to try to cut crime in the future. What we say is that it is important that we do not get into a debate about the statistics, but that we look into the effect.
	I am not sure whether the hon. Member for Bury St. Edmunds agrees that what people want, in the end, is the visibility of police officers. They will accept any changes in backroom staff, so long as a police officer turns up when they ring and ask for an officer to be present. They will forgive us a great deal if we continue to provide that basic service. If we do, they will understand that there must be changes in the way that the police do their business.
	I was as surprised as most when we read in the papers and heard on the radio that the overtime rates have shot up to such an extent that some police officers may be paid-I do not know whether this was mentioned before I came into the Chamber-£100 for answering one phone call on overtime. That is an enormous sum of public money. We do not know how many calls are answered. When I put that to the Minister this morning, he said that the Government needed to be robust in dealing with it. I said that we should have attached strings to the increase in police funding. We should have required police authorities to do more so that such stories did not emerge and so that we did not see a ballooning of overtime payments for the police.
	The Government are responsible for making sure that that happens. We cannot wait for local forces to achieve efficiency. There must be some direction from central Government because it is central Government funding. I hope that that will happen in the long run, under whichever Administration take office after the next election. We should be much clearer about how public money should be spent.
	We suggested in our last report that we should spend money on new technology. All officers should be given a hand-held device so that they can take statements at the time of an incident. That would save time. They could use that instrument to find out whether a car had been stolen. That would save the time of witnesses and of the police. Perhaps the Minister will tell us whether that scheme has been rolled out. It is a no-brainer to make sure that our police are provided with sufficient equipment to enable them to do their job as efficiently as possible.
	My final point relates to accountability. The Select Committee has not considered the question of elected commissioners or police chiefs at a local level, as opposed to the current system. The Government wanted to ensure that members of the police committee were elected. They then withdrew that proposal. My concern is the way in which the current system is run. We may know, as elected representatives, but the public do not know, precisely who sits on police committees.
	In addition to local police forces acquiring greater visibility, police committees need to ensure that they are more visible, so that if people had complaints about policing, they would not necessarily have to make a complaint against the police. They could go to their local police authority member and ask them to take up their complaint. Police authority meetings would not then be seen as private meetings that are held in police headquarters. More information would be provided to the public. Perhaps by means of modern technology, such meetings could be televised by the police and put online so that people had access to what was being decided on their behalf.
	I am not sure that that would mean that we do not have elected police chiefs. That is a debate that we need to have. There are no conclusions from the Committee and I have no personal views on the matter, but the public needs to be much more involved in the process than they can be by attending one or two local neighbourhood meetings. In any popularity contest, the local beat officer is infinitely more important and more popular than any other local official, apart from the local doctor. Of course, we are way down the list because we are elected officials and nobody likes Members of Parliament, do they? Local councillors are probably one rung ahead of us.
	That local popularity must be translated into an understanding of how the local police force works. I hope very much that we will engage in a discussion that will allow more information to go to local people, so that they feel better informed and know that their money is well spent. We will never have the opportunity again, in my view, when people will not require value for money from local police forces.
	It is a terrible state of affairs that special measures may be introduced for forces such as the Nottinghamshire force. We have had to wait so long for action to be taken. I know that the Minister told us today that these were matters for the inspectorate, but the inspectorate should have acted sooner. Why was it allowed to reach a stage where a police authority with a multimillion pound budget and chief officers who are paid hundreds of thousands of pounds are assisted to do their job? That cannot be right.
	There must be a better system of monitoring our local police forces at a local and national level, through the inspectorate. Whether it is through the National Policing Improvement Agency or by Denis O'Connor, someone must do their work better so that council tax payers and citizens, like those of Nottinghamshire, do not have to see their local police force being taken over because it has not been properly run. We want to make sure that that is the only case of its kind, and that we act before we get to that stage.

Humfrey Malins: I hope to say a few words about the county of Surrey, and I very much hope that the Policing Minister will at the end of the debate acknowledge not only that Surrey has a very good police force, but that our county has particular problems. I am quite certain that my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley), who will be the next Policing Minister, will take a similar line.
	We have a very good police force in Surrey. It is well led by chief constable Mark Rowley, and the British crime survey assessed that it was the absolute top force in the country in terms of public confidence in the police and local councils' joint work to deal with antisocial behaviour. In Surrey, not least because of financial constraints, we are focusing very hard on local expectations rather than on national targets.
	We perform well with a low level of funding. So far, so good, but funding has always been a problem for Surrey. I do not expect any Government Front Bencher to talk as positively as I shall about extra funding for Surrey police, but we are in a bad way. A lot of funding comes from a central Government grant, and some comes from the county council precept, but Surrey has historically received one of the lowest per capita levels of central Government funding of any police force in the country. For example, Government funding for Surrey police in 1996 was £96 per head of population. By 2009-10, it had dropped to £93, which is £57 below the national level. That is not a happy state of affairs, and the formula that the Government use to allocate funding to forces does not reflect the real cost of policing our county.

David Hanson: I am grateful for those figures from the hon. Gentleman, but they do not equate with my understanding, which is that Government grants to Surrey increased by £48.4 million, or 23 per cent. in real terms, between 1997 and 2009-10.

Humfrey Malins: That drags us into the issue of the formula, which is mind-bogglingly complicated. I shall address that in a minute. If we work out our population and the application of the formula over those many years, we are left with the figure that I gave the House a moment ago.
	Surrey has rather different problems from those of any other county. We are the best away-day county for criminals. I do not say that all criminals come from somewhere other than Surrey, but the M25 has certainly helped them. When my house in Surrey was burgled seven years ago, I was sure that an hour and a half later the burglars were somewhere north of London. I do not know why I think that all burglars come from north, as opposed to south, London. What a bias I show! I do not mean that at all; I withdraw it. However, the reality is that the motorway has helped considerably. Being serious, I think that 50 per cent. of crimes in our county are committed by cross-border criminals from neighbouring areas. That aspect of life in Surrey is not accounted for in the funding formula. We have extra, different problems and responsibilities in Surrey, and they are not reflected in the formula, although I hope that they might be in the future.
	At this point, I address my remarks particularly to my hon. Friend on the Opposition Front Bench. The M25, for example, has extra policing requirements, and we also have to help with Gatwick and Heathrow, which are both massive airports. Then there is the odd, one-off case, of which Surrey seems to have rather too many. They are the one-off cases in which there is an extra bill for Surrey council tax payers, who fund the police precept. A typical example was the General Pinochet situation, when we had to look after him in Surrey for years and years but got no extra money for doing so.
	There is another little issue, which I discussed with the chief constable not long ago: terrorism. One thinks of Surrey as a county with leafy lanes; one would not somehow associate it with terrorism. But in Surrey there are potential cells-put it that way-of people who do not mean well, and I know that the burden of expense on the police force has been increasing. Trying to explain that Surrey faced extra burdens in that connection, I raised that issue, and some time ago so did my noble Friend Lord Trefgarne. He did so in the other place with the noble Lord West, who answered on behalf of the Government. As I have said, Surrey does very well with a low grant.
	It was sad when our policing grant was capped, however. It was a terrible business when the decision was announced. We had a big debate about it in Westminster Hall and I remember that all my Surrey colleagues were there. The decision was made to ask Surrey police to return £1.6 million to the Surrey tax payer at an actual cost of £1.2 million. It is ludicrous to spend £1.2 million to send back £1.6 million, and it was an indefensible decision. When we set that against the chronic shortfall in central Government funding, in particular, we find that it was a sad state of affairs.
	I come now to the funding formula. I am not aware of whether you, Madam Deputy Speaker, have a first-class degree in mathematics-that seems to me entirely possible-and the Minister may well have such a degree. However, I defy any Member of the House to explain, in comprehensible terms, what this formula is. For posterity, I shall quote from a magnificent document called The Police Grant Report. Wait for it, Madam Deputy Speaker-it is incomprehensible. I have never, in-I was going to say my 64 years of life, but I will say my long life-come across anything that is such gobbledegook: I am flabbergasted by it. This part is one of about 15-it talks about something called top-ups, and is headed Police Crime Top-Up 1. Here we go; I advise the Minister to make a note:
	2.6482  multiplied by DAYTIME NET INFLOW PER RESIDENT POPULATION;  plus
	0.2953 multiplied by LOG OF BARS PER 100 HECTARES;  plus
	16.2210 multiplied by INCOME SUPPORT/INCOME BASED JSA/GUARANTEE ELEMENT OF PENSION CREDIT CLAIMANTS;  plus
	34.1326 multiplied by SINGLE PARENT HOUSEHOLDS.
	Well, it is impossible; I could look at that on an exam paper for a couple of hours and would not have the slightest clue. At the end of the document, under the heading Scaling Factor-I do not have a clue what a scaling factor is, and I am still none the wiser-it says:
	The scaling factor used in paragraph 5.6...is:
	0.999997836417373.
	It is magnificent.

David Hanson: I can help the hon. Gentleman: the answer at the end is usually not enough.

Humfrey Malins: I am very grateful. The Minister is a very good man for whom I have had the greatest respect over the years, and that respect remains even now.
	Surrey is battling on. Something rather innovative is happening in our county, and I wonder whether other police forces are aware of it; I suspect that the Minister will be. Whatever the financial constraints, we are trying to get 200 more visible police officers on the streets. How are we going to do that? Well, there are some very interesting new ideas as regards what is happening in Surrey. There are to be cuts in the number of senior officers, and cuts in bureaucracy. The chief constable, Mark Rowley, is exploring, with local councils, opportunities to locate local policing teams within borough and district council offices to provide a better service to the public in tackling local problems. That approach has been piloted in my own constituency of Woking. I wondered about it to start with, but then I thought after a while that it is not a bad idea. People can pop into the council offices, and the police are there. They sometimes want to have a chat about various issues, and they do not have to go miles from one place to another. Then I thought of one or two clapped-out police stations in Surrey, and realised that it is no bad thing if the police can move around a bit and, in the meantime, save a bit of money that they can use for front-line policing. That approach is working pretty well in Woking; Addlestone has also reaped its rewards. Having more accessible places for the public to meet the police is a great idea, and replacing some old and expensive police buildings can help as well.
	In my retirement, I plan to spend day after day looking at the police formula and trying to comprehend it. There may come a time when I send a note to my colleagues saying what it really means, but I think that the Minister is absolutely right-it means We need more money, please. One day, surely, the formula must be revisited a little bit; we should recognise that it can operate somewhat unfairly against an extremely good county such as Surrey.

Gary Streeter: It is a great pleasure and privilege to follow my hon. Friend the Member for Woking (Mr. Malins). The House will miss his witty interventions when he retires-ridiculously early, if I may say so-at the next general election.
	In this short debate, we are considering the police support grant for 2010-11. However, the elephant in the room is what happens in April 2011 for 2011-12 and onwards.
	It is good to see that the right hon. Member for Leicester, East (Keith Vaz), the Chairman of the Home Affairs Committee, has come back into the Chamber. I know that he is going to stay throughout the entirety of my speech, so he may wish to take his place. I agree with him that much of the evidence that we have heard over recent weeks and months suggests that from April 2011 onwards, there will certainly be a tightening of the position. Many chief constables and police authorities around the country are concerned about that.
	It seems to me that whoever wins the election, from April 2011 there will be a tightening of budgets. The key challenge is protecting front-line policing when budgets will be under constant pressure, probably for three to five years. Obviously, that will partly depend on individual police officers being able to improve how they deliver services, through some of the ideas that have come forward this afternoon, and it will partly be about saving costs elsewhere in the system in a way that does not have an impact on front-line policing. I wish to suggest one possible way of doing that, using my own police authority-Devon and Cornwall-as an example.
	First, I wish to say that Devon and Cornwall has a good police authority and a good police force, and I pay tribute to all the hard-working police officers in my constituency, whether they are inspectors, sergeants, constables or police community support officers. Day in, day out, they do an excellent job, and all credit to them. I obviously welcome the uplift in the amount of money that Devon and Cornwall will receive over the next 12 months-an additional £5.746 million, making a total grant from the Government of £117 million, which is very welcome. The police authority's total spend in the 12 months to March 2009 was £295 million, which shows that a lot of its income is received apart from Government, but we welcome any increases in Government funding.
	As I said, from April 2011 we will struggle to safeguard front-line policing, whoever is in power. How can we do that? I was looking last night, sad person that I am, through the Devon and Cornwall police accounts for the year to 31 March 2009. I was interested to note that it cost £1.4 million to run the police authority-not the police force but the bureaucracy and administration necessary to support it. If we are successful in winning the next election-let us face it, it is by no means in the bag and it will be a very close contest-our innovative and radical plan of electing police commissioners will cut most of that cost at a stroke. As a country we are short of radical ideas for police forces, but that would mean that we would not need so much bureaucracy, so that £1.4 million could mainly be diverted towards police officers.
	I know that the chief constable of Devon and Cornwall will not thank me for pointing this out, and he is a good chief constable doing a good job, but I was interested to note that he is paid a salary of more than £175,000.

Humfrey Malins: Good Lord.

Gary Streeter: Indeed, and that is much the same as the Prime Minister. I do not know what other Members think, but I find it hard to understand how people in the public sector doing lesser jobs than the Prime Minister can justify salaries of that magnitude. When the Prime Minister goes to bed at night he is concerned about Northern Ireland, the situation in the middle east, Afghanistan and all the pressures that he is under. It is not quite the same to grapple with crime on Union street in Plymouth, serious and important though that is. I am not saying that the chief constable's salary is too much, but I wonder whether many people in my constituency are aware of how much he earns. Perhaps they will be from tomorrow onwards.
	There are five police officers in Devon and Cornwall who earn more than £100,000. I did not know that until last night, and I do not think many of my constituents do. In the great wider debate about public sector salaries at senior level, it is important that our constituents have the information on which to make their judgment. I certainly agree with those who say that no one in the public sector should earn more than the Prime Minister in the years ahead.
	Devon and Cornwall police authority spends £500,000 a year on press and publicity. Maybe that is money well spent, and perhaps it is a reflection of the world in which we live, but it is still an awful lot of money. It could pay for five senior police officers, I suppose.
	The main thrust of my argument-the Minister has heard it before, and I have bored the Home Affairs Committee with it quite a lot in recent weeks and months-is that we can do an awful lot more to ensure that there is co-operation between police forces, up to and including voluntary mergers. When that was being discussed five or six years ago by the then Home Secretary, the right hon. Member for Norwich, South (Mr. Clarke), whose views we now agree with daily-he has some great insights into the workings of this Government-I completely opposed the suggestion that Devon and Cornwall police should merge with other authorities. However, as I have said in the Home Affairs Committee and to wider audiences, I was completely wrong on that. The Government were wrong to force such mergers from a top-down position, and we have probably arrived at a much more balanced situation today. Police forces up and down the country are being encouraged-and they are doing so voluntarily-to look at the savings that can be made by co-operating or merging with their next-door police force.
	As part of the Committee's studies, we interviewed the very impressive Chief Constable Parker of Bedfordshire police. Answering a question from me about the possibility of her force merging with the Hertfordshire police force, she gave me this information:
	Since 2006 the Chief Constable of Hertfordshire and myself have been working with our authorities on a collaboration programme. We have collaborated to the extent that we have joint units of more than 500 police officers and staff and that has saved us £2.2 million year-on-year. Our estimates-in fact they are more than estimates because we have worked very hard on the business case-are-first of all, the bad news-that it will cost us £20 million to make the merger happen, but within three years we would be gaining savings of £14.6 million per annum.
	My maths is not particularly strong, unlike yours, Madam Deputy Speaker, with your first-class degree in the subject, but £14 million savings for £20 million is a pretty good start-it is for only three years.
	Chief Constable Parker went on to say:
	To put that against the picture that we were working on in terms of budget gap, we estimate-this is an estimate obviously-that by 2013-14 combined forces would have a budget gap of over £23 million.
	Whoever wins the next election, that is the sort of challenge that police forces are going to be looking at-that was from the horse's mouth, the chief constable of Bedfordshire. One way we can fill that gap is to encourage police forces to consider voluntary merger.
	What kind of savings could be made and on what functions? If Devon and Cornwall police merged with Dorset police, the new force would need only one chief constable-thereby saving a very significant salary-fewer senior officers and only one headquarters. I imagine that one force could get away with far fewer accountants in the police authority and, presumably, one force would need the same number of press and marketing people as two-they would just need to cover a slightly wider territory. Money would be saved on back-office costs, administration, and human resources and personnel. Such savings could add up to many millions of pounds. The Devon and Somerset fire services recently merged. There were quite a few wobbles and concerns about that to begin with, but things settled down extremely well, and it has been able to save significant sums in back-office functions. Police forces could do the same.
	One may ask, What about accountability? but I would answer, clearly and boldly, that Devon and Cornwall police authority has no real accountability to the people of Devon and Cornwall. I must confess-this is shocking admission-that I did not know the name of the chair of Devon and Cornwall police authority until I looked it up this morning on the internet. The chair recently changed, so that was not completely hopeless on my part, but I did not know the name and I am supposed to be an informed elected representative of that area. If I asked my constituents how many of them could name the chair of the Devon and Cornwall police authority, I suspect the answer would be three or four. That is the reality: there is no connection between the authority and the people of Devon and Cornwall.
	Accountability and connectivity happens at base command unit level. We have a tremendous relationship with the commander of the Plymouth BCU-local Members of Parliament and councillors have regular meetings with him and he is a very impressive officer-and a tremendous relationship at ward level, with inspectors, sergeants and constables on the beat. That is how most communities relate to their police. They relate to their beat constable, and they might go to meetings to which an inspector or sergeant might go. The relationship is not with the police authority or with the headquarters at Middlemoor in Exeter; it is much closer. Therefore, adding Dorset to Devon and Cornwall police, or even going a step further to incorporate Avon and Somerset within the same police area, would not diminish accountability on the ground, because accountability happens in a very different way. It is wrong, of course, to do things just for financial reasons, but I see little or no downside to a bottom-up rationalisation of police forces-not top-down pressure from the Government in which they would define the values of mergers-that could save millions of pounds. Such a rationalisation would help whoever wins the next election to bridge the gap and keep police officers on the front line. I encourage chief constables to speed up discussions with neighbouring authorities and consider voluntary mergers.
	My experience in 17 years as a Member of Parliament has been that uniformed services-be they the armed forces, the ambulance service, the fire service or the police force-are slow to change and can be poor at embracing technology. It is not good enough to leave things to them. A little pressure from the Home Office is necessary to encourage police forces to seek the most efficient way to deliver their services.
	The police force in Devon and Cornwall spends an awful lot of money every year on policing Travellers. We have an increasing number of intrusions into my constituency, and one reason why they are so expensive to police is the system for dealing with them. In almost every case, the local authority must serve a notice, which means consulting lawyers and putting legal papers in order, and that is expensive. Then the authority must wait for the notice to expire, during which time the police are in attendance in most cases-costing money-but they are not free to act. The legislation needs to be looked at again-

Brian Binley: Does my hon. Friend agree that, once the process has been completed, the Travellers go on a little circuit, returning in nine months to a year, and the whole process has to be gone through again? In my patch, that has happened for five years in one particular area-it is crazy.

Gary Streeter: I agree strongly with my hon. Friend, and the House needs to look at this issue again. We need to modernise and streamline the law, because it is an expensive problem that causes great irritation in the local community. At the very least, the police should have the power to move Travellers on without waiting for the local authority process to take place. I do not quite understand why that is not the law, although I am sure that it is for good reasons. The Minister may not want to touch on this when he winds up, as it is slightly outside the scope of this order, but it is a costly business and very frustrating for local councils and our constituents.
	My main point is that whoever wins the next election will face tremendous challenges. One way to bridge the gap and ensure that we can support and protect front-line policing is to try to encourage all police forces to consider increased collaboration and voluntary mergers.

Stewart Jackson: In the middle of the 19th century, Lord Palmerston said:
	Only three people have ever really understood the Schleswig-Holstein business-the Prince Consort, who is dead-a German professor, who has gone mad-and I, who have forgotten all about it.
	One could say almost the same thing about the police formula grant. Yesterday was Groundhog Day, and that is what it feels like today for me, because for the past three years I have come to put to Ministers, either in the Chamber or in Westminster Hall, the sui generis situation in Cambridgeshire of consistent underfunding of its constabulary.
	I begin by paying warm tribute to all the staff, police officers and police community support officers in Cambridgeshire, especially to the leadership of the chief constable, Julie Spence, who has made a coherent, cogent and strong case for increased funding on the basis of a perfect storm of issues that have affected the Peterborough constituency in Cambridgeshire, alluded to earlier by the Minister and, generously, by the right hon. Member for Harrow, East (Mr. McNulty), the former Minister. I speak as someone whose father served in the Metropolitan police for 25 years and whose younger brother is a serving Metropolitan police officer.
	I thought that the Minister showed a strange mixture earlier of cocky complacency and rather pugilistic arrogance, which is unusual for him-he is normally pretty emollient and amenable to arguments. We do not see policing in Peterborough through his rose-tinted glasses, and it ill-behoves him to lecture and challenge us on our fiscal policies given that his Government have presided over an appalling deterioration of public finances and have been unwilling, or unable, to come forward with a comprehensive spending review for the next period. All the Government's prognostications, pledges and promises are therefore worthless. They certainly care, but they cannot possibly know what situation will prevail beyond 2011.
	That pertinent and apposite point was made by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) from the Front Bench. As I made clear earlier, prior to the May 2005 election generous promises were made on the then vogue of having more police community support officers, and a promise was given to deliver 24,000 over the next period of the Labour Government. They were re-elected, but failed, by 8,000 officers, to deliver on that manifesto pledge. So hon. Members will understand if I consider that the Minister might have gilded the lily somewhat in his self-congratulatory speech.
	I shall return to the situation in Cambridgeshire. The Minister will know that I secured a debate in Westminster Hall in February 2008 on funding in Peterborough and Cambridgeshire, in which I was supported by hon. Friends and the hon. Member for Cambridge (David Howarth). We made the case that, in our opinion, Cambridgeshire was a special case. The floors and ceilings system must be looked at again, because although we received a slightly more than average increase this year, cumulatively under the damping mechanism we have lost £2.7 million. Since the mechanism was put in place in the 2004-05 fiscal year, we have cumulatively lost £16.5 million, which equates to about 80 additional police officers who could have been recruited to tackle crime in Peterborough and Cambridgeshire.
	The Minister will know that Cambridgeshire has one of the fastest-growing populations in England and faces specific issues with large-scale EU migration. Close on 20,000 EU migrants-mainly Lithuanians, but also Latvians and Poles-have come to Peterborough in the past six years, and inevitably that has demonstrably put a strain not only on primary education, primary care and housing, but on crime and policing. That is the reasonable and fair point that Mrs. Spence, the chief constable, has consistently put to Ministers over a significant period-but to no end, apparently.
	If one takes the census figures as read, including the 2006 mid-year estimates, we remain the sixth lowest funded force per thousand head of population for police officers and the fourth lowest overall for all staff in the whole of England and Wales. Unfortunately, despite the lobbying and myself and others imploring the Government to consider our specific issues, we compare very unfavourably with comparator forces such as Essex, Gloucestershire, Avon and Somerset and Warwickshire.
	I want to return to the stresses and strains caused by the ramifications of the free movement directive, which was enacted in May 2004 for EU migrants. I have never said that those people-many of them good, decent, hard-working people-are particularly responsible for any more or less crime than anyone else. That is not the point. The issue is the large numbers. The right hon. Member for Harrow, East made the point that things have moved so quickly that the Office for National Statistics, the Home Office and the Migration Impacts Forum have failed to keep track of the numbers and the pressures that have arisen so quickly, changing the character of whole neighbourhoods and making the challenges so significant for senior and beat police officers.

Paul Holmes: On the hon. Gentleman's point about whether migrant labourers are more likely to be involved in crime, I understand that some recent research has shown that they are more likely to be the victims of crime. That still causes extra costs for the police, because of translation services and all the rest of it, but migrant labourers are more likely to be the victims of crime than the cause.

Stewart Jackson: The hon. Gentleman makes an astute point. The research consultancy Ibex Insight undertook a study called Policing Peterborough in 2005, which made that exact point. To give a simple example, where single women who do not earn very much money are living with younger men in houses in multiple occupation, they are, whether we like it or not, likely to be the victims of offences as serious as sexual assault, theft, intimidation and so on. That was one of the findings of that report, which was commissioned, incidentally, by Cambridgeshire constabulary to support its argument on funding.
	The hon. Gentleman is quite right that we are not stigmatising the migrant work force, but saying that both ends of the spectrum-from those who perpetrate crime to those who are the victims-put significant extra pressure on police forces. Around half of all the cases processed through the custody block at Thorpe Wood police station, in the west of Peterborough, involve people whose first language is not English. One can imagine the substantial revenue issues that that raises for Cambridgeshire constabulary. Indeed, the projected cost of translation and interpretation in this financial year is £865,000. The cost of using the interpretation service offered by Language Line Services Ltd runs at approximately £7,300 a month, while 22 per cent. of those using it are Lithuanian, 19 per cent. are Polish and 12 per cent. are Russian, with a significant number-two dozen-of various other languages used.
	For that reason alone, Cambridgeshire is deserving of a specific review of its funding, and that is without taking into account the issues of tourism in Cambridge, the organic growth of residential housing in the county and, as touched on by my hon. Friend the Member for South-West Devon (Mr. Streeter), Gypsies and Travellers, who have crime-related issues that have had a big impact on the south of the county in the constituencies of my hon. Friends the Members for South Cambridgeshire (Mr. Lansley) and for South-East Cambridgeshire (Mr. Paice).
	We would not be so concerned about the issue if the crime figures were not so spectacularly out of kilter with the views of the Minister. In the city area of Peterborough, we are more than twice as likely to experience problems of acquisitive crime, as compared with the English average. The rates for robbery, burglary, sexual offences and theft from a vehicle are all twice as high as the average too, while our rate for violence against the person is one third higher. Indeed, some in my constituency have said that over the past year we have witnessed, on the latest figures, an epidemic of acquisitive crime. Burglaries are up by 20 per cent. and robberies are up by 37.5 per cent. since 2008, notwithstanding the excellent work of Cambridgeshire constabulary, in particular through Operation Alert. It might be as well to mention the great work of Chief Superintendent Andy Hebb and his deputy, Superintendent Paul Fullwood, who are trying their best to deal with having very few officers and an increase in crime.
	Policing is only part of the issue. We need to look again at sentencing policies, the role of the judiciary and the message that they send out to victims and criminals and those who would be tempted to commit crime. I mentioned in passing last week one of many examples, I am afraid, from Peterborough Crown court: the case of Lee and Carl Edwards, two brothers in my constituency, who were convicted on 135 counts of burglary between them. The judge at the trial, deputy circuit judge John Farnworth, considered it appropriate to jail them for 30 months and 51 weeks. The message that sends to my constituents-decent, hard-working people who get up in the morning, take their children to school, look smart, take pride in themselves, go to work and earn a decent wage-is that the judicial system does not care about them; it looks after people with so-called chaotic lives, at the so-called fringes of society, and it is more interested in them than hard-working people. That has to be a factor not just in the number of police, but in the way in which the judicial system works. The feeling that some people have is that the system works to the advantage of the criminals, not the victims.

Justine Greening: To bring my hon. Friend back to the financing debate that we are having today, does he agree that the problem is that, even when the police catch criminals, they are back out on the street because of the Government's early release scheme? That alone costs forces more money than they have-

Madam Deputy Speaker: Order. I must rule the hon. Lady out of order because we are talking not about sentencing policy, but about the grant that police authorities have.

Stewart Jackson: I am grateful for your guidance, Madam Deputy Speaker, but I concur heartily with my hon. Friend.
	May I finish on some of the points made by my hon. Friends? I totally agree with the views expressed by my hon. Friend the Member for South-West Devon. The problem with the mooted 2006 mergers was that they were top-down and forced; there was little public consultation and little opportunity to debate properly the issues surrounding the specific challenges and problems of each force. The then Home Secretary understood that. There is ample evidence that, on payroll, human resources, procurement and premises, local police forces can and will work together. My hon. Friend is right about Devon and Somerset fire service, which is accruing significant savings as a result of that.
	There is a huge deficit in accountability because many senior police officers are accountable to no one but the Home Secretary in practice. They must be accountable within strict parameters and a framework that we all buy into and understand and that has legitimacy in the House and beyond to local people, with their local priorities. We should never be in a situation where the operational decisions of the police are in the hands of politicians, who may use them for electoral advantage. I do not agree with that, and that is not the case in most places in the world. However, we need that golden thread between ordinary people on the street and their experience of crime and policing, and the people who make the decisions in central Government and at local level in the constabulary. For that reason, I heartily support the call by hon. Members and hon. Friends for elected police commissioners. That will restore people's faith and trust in the criminal justice system. It will mean that people have a real input into the decisions that are made about their local communities and tackling crime. Most people are law-abiding and decent, but they want fairness, accountability and transparency.
	With that, I hope that the Minister specifically addresses the issues that I have raised about the Cambridgeshire constabulary. I pay tribute to all the people who work in the police service in Cambridgeshire, and I hope that we get a better settlement when we have a Conservative Government in the next few weeks.

Brian Binley: I wish I could tell the Minister that my remarks will be sizeably different in any way from many of those who have spoken before, but they will be similar-except that I shall talk about the needs of Northamptonshire whereas other Members spoke of the needs of their counties.
	What strikes me, however, is the degree of cross-party unanimity on the need to reform the formula. We heard a wonderful display of proper contribution to debate from my hon. Friend the Member for Woking (Mr. Malins), who is no longer in his place, about the total lack of ability to understand formula funding and its detail. I hope that the Minister will be able to promise us a total review of funding to ensure that when the new funding formula is introduced, it will be understandable at least to those who have to read these documents and try to make sense of them, but who, as my hon. Friend said, so far fail to do so on every occasion. I do not want to test the Minister on his knowledge of understanding of the formula. [Hon. Members: Go on.] It would be cruel to do so. There is a real need, however, to create a greater understanding for all of us.
	There is also a real need to create fairer formulae. I know that my own county constabulary-as I shall explain in a little more detail later, it has missed out badly as a result of formula funding and experienced considerable difficulties with financing-has worked tremendously hard and wants to communicate that fact to the people it serves. A police survey is currently under way, which simply asks, I would be prepared to pay more council tax for a higher level of service. Yes or No? I do not know what the result will be, but it shows that there is real concern about police funding. I know that my county constabulary is most concerned about formula funding.
	I welcomed the remarks of the former police Minister, the right hon. Member for Harrow, East (Mr. McNulty), who is no longer in his place. He spoke thoughtfully on the basis of his long experience, but he made the same point that I am making to the Minister at this very moment-the formulae used for funding are so open to total incomprehension that they must be reformed. That from an ex-Minister. I know that the present Minister has a number of very clever civil servants supporting him-they are sitting in this Chamber at this moment-and I hope that they will understand the depth of feeling among us on this issue, because we need everybody to get behind this. If we manage to make the changes we want, it is they who will have to do the work, and I wish them very well.
	I have had a number of discussions with my own constabulary, the last this morning, about the particular issues affecting it. The damping arrangements are a particular problem. Damping is supposed to subsidise forces with the least relative need by taking grants from those forces with the greatest relative need in order to ensure that they receive a minimum year-on-year increase rather than a cut. That is my basic understanding of damping as a formula.
	Tragically, damping is not working-certainly not in Northamptonshire. My police authority and county constabulary believe that they suffer from a particularly unfair example of formula funding. Northamptonshire police estimate that they will lose £853,000 of formula grant next year as a result of damping. Indeed, they tell me that they have lost £1,844,000 of formula grant over the last three years because of this particular process. As the Minister will know, that is a great deal of money to Northamptonshire police. In fact, it equates to 20 extra officers in the county each year.
	I have already observed that the east midlands region seems to be particularly damaged by this element of formula funding. It is estimated that over the last three years the region has lost £60 million of formula grant that it believes should have come its way. As I pointed out in an intervention, that equates to an additional 600 officers each year. I was pleased to hear the hon. Member for Chesterfield (Paul Holmes) make the same point earlier.
	Northamptonshire county constabulary are particularly bewildered by the results of damping as it affects Northumbria police, who are the biggest gainers in this respect. They receive £36 million of subsidy per annum, which allows the local authority to freeze the council tax. How my own police authority would like to be in the same position, but it is not. It is especially unfair that, owing to the cumulative effect of damping over a number of years, Northamptonshire police are consistently being denied the level of grant that they require according to the needs formula itself. That seems to me like Alice in Wonderland.
	If there was ever a need for change, this is it. I should like someone to look in the mirror, decide that change is needed, and tell us that it is going to happen. I hope that the Minister, who has been fair and courteous throughout the debate, will be able to promise to review the formula funding process.

Paul Beresford: He will not be here to do it.

Brian Binley: Well, he is here now, so he can make the promise now. I would expect a similar promise to be made from my own Front Bench. If the Minister makes that promise today, I shall be able to go back to Northamptonshire and tell the county constabulary, who will be immensely happy. The Minister can see how easy it is to make our policemen happy, and I hope he will try to do that.
	There are other reasons why I believe that the funding formula should be changed. As my hon. Friend the Member for Woking pointed out in his amusing speech, we need only look at the book to see how complicated it is, but no formula is any good if the basic input figures are wrong. This formula uses national statistics, and, unbelievably, the Office for National Statistics concluded that Northampton would experience no population growth between 2000 and 2008.
	I am sorry, but Northampton represents part of the Government's major expansion plan. I am sure that the Minister has been to my town and has seen the thousands upon thousands of new houses. I do not know who lives in them. I know some of my constituents but not the whole lot, and many are relative newcomers. Unless people in Northamptonshire are dying at an incredible rate there must have been an increase in population, but those are the figures that were used for the funding formula. No wonder we consider them to be totally discredited.
	My good and hon. Friend the Member for Peterborough (Mr. Jackson) mentioned immigration. As in Peterborough, so in Northampton. We have seen a massive influx of mostly very good people-mainly from eastern Europe-but some of them are not so good, and they place put a sizeable additional strain on our police force. The formula is not nimble and quick-footed enough to be able to take that increase into account. Therefore, Northamptonshire misses out again, especially bearing in mind that the county town accounts for about a third of our population.
	All specific grants, excluding the neighbourhood policing fund, have been frozen for six years. That means there will be a real-terms cut for Northamptonshire police. Indeed, Northamptonshire's capital grant from Government is frozen at £1.379 million. Specific grants are used to fund activities such as rural policing, and rural policing is especially expensive. I know from all my correspondence and conversations with people from the rural area that I myself live in, which is just outside Northampton, how strongly the local rural population feels that it is not getting a good deal from the police service. The people there rarely see a policeman. It is true that Northamptonshire police have tried very hard to lift the profile of policing in rural areas, but the fact of the matter is that the local population still feels it is being hard done by, and I would put money on that also being the case in constituencies across the land with rural areas.
	I ask the Minister to look at this issue as a matter of urgency. He has heard that plea from Members on both sides of the House during this debate. I simply ask that when he rises to his feet, he looks at me and smiles sweetly, and says how much he agrees with the hon. Member for Northampton, South and that he will ensure that the change to the formula funding is undertaken and that that will create an easier to understand and fairer situation for constituencies such as mine and counties such as Northamptonshire-and I hope my Front-Bench spokesman, the hon. Member for Bury St. Edmunds (Mr. Ruffley) does the same thing.

David Hanson: With the leave of the House, I would like to respond to the debate. It has been very interesting, and there have been some common themes-and there has also been occasion to smile, just for the hon. Member for Northampton, South (Mr. Binley). The main common theme is a point I mentioned at the beginning of the debate: every Member who has spoken represents an area whose police force has more officers now than 12 years ago. The local force of the hon. Member for Peterborough (Mr. Jackson) in Cambridgeshire, for instance, has 109 more officers than 13 years ago. The police forces covering the constituencies of every Member who has spoken today also have more resources than in 1997 in real terms, including, dare I say it, my own force in north Wales, which has £45 million more than in 1997 in real terms. Every force of every Member who has spoken today has lower crime rates than in 1997, too. Overall, the rate is 36 per cent. lower than in 1997. Therefore, whatever points Members have made in this debate, the background to it is that we are still working from a very strong base in terms of the resources, crime figures and police numbers in their constituencies.
	Under the police settlement for 2010-11, next year there will be about £259 million more for policing across England and Wales than this year. That means that every force of every Member who has spoken in the debate will get a minimum increase of 2.5 per cent. The average increase across the board will be 2.7 per cent., with a high of 3.5 per cent. in the case of Avon and Somerset. That is extra resources at a time of recession with a commitment from Government to meet those resources, and along with that there is falling crime, higher police numbers and more resources in general.
	I accept that there are some issues, however. The hon. Member for Bury St. Edmunds (Mr. Ruffley), my right hon. Friends the Members for Harrow, East (Mr. McNulty) and for Leicester, East (Keith Vaz), and the hon. Members for Woking (Mr. Malins), for Peterborough (Mr. Jackson) and for Chesterfield (Paul Holmes) all said that they have concerns about the funding formula. I can also, at last, smile sweetly at the hon. Member for Northampton, South, because he has raised that issue in a way that can only charm me into responding to him in a positive way. I must tell all those Members that we keep the funding formula under review. I recognise that, as the hon. Members for Woking and for Peterborough mentioned said, there are pressures from population factors, tourism and a range of other issues; in Wales-in my part of the world-Cardiff city council and the South Wales police force are raising issues relating to sporting events.
	We are undertaking a review of the funding formula. It was started in September 2008 and is due to conclude shortly. I would like to announce a public consultation period over the summer of 2010, after-I hope-I have been re-elected to this office in the general election. The points that colleagues have made should be passed on to me and my officials, because we need to examine the issues as part of the public consultation. We have given a commitment to examine the funding formula for the next comprehensive spending review. We did not want to carry out that examination in the middle of the current three-year cycle, because there will be winners and losers in any potential change.
	There is a genuine wish-the hon. Member for Northampton, South can take this back to his constituency this weekend-to say that there will be a review and a consultation, that an assessment of the factors mentioned in this debate will be made and that there will be a revised funding formula, in one shape or another, for the next comprehensive spending review. As hon. Members will know, we have removed the ceilings-floors still exist and we intend to remove those. The time frame has not yet been determined, but we will seek to remove them when we can. We need to ensure financial stability.

Brian Binley: I welcome the Minister's remarks very much, and I believe people in Northamptonshire will too. Will he ensure that when that review is undertaken a relatively extensive consultation on the issue takes place? We need input from as wide an area as possible.

David Hanson: There will be a public consultation, and I hope that it will take place in the summer of 2010. It will be up to whoever forms the Government and whoever the Policing Minister is to take that forward, but there will be a need to examine the funding formula. We anticipate that that will happen and it will involve widespread discussion. We certainly want to look at that positively.
	The hon. Members for Chesterfield and for Peterborough made points about population estimates. They are based on the census, but they are projected forward by the Office for National Statistics. The formula does still use the most up-to-date population data possible as part of our assessment for the future. When I see the evidence before me, I can do no other than accept that there are disparities in the funding agreements because of the formula; the range is from 36 per cent. in Northumbria to minus 4 per cent. in Essex, and we are examining those wide variations. But I still contend that the formula is good for the current cycle in its form, it has delivered more resources and the £259 million that we have put in has been important.
	The hon. Members for South-West Devon (Mr. Streeter) and for Bury St. Edmunds raised the valid point about funding post-April 2011. They will both know that I cannot commit on the broadest Home Office funding issues at the moment, because we do not have a CSR. In answer to the point made by the hon. Member for Bury St. Edmunds, I should say that the Chancellor has made a commitment to ensure that forces can maintain their officers numbers, be they police community support officers or full warranted officers. The forces will receive sufficient funding to maintain whatever officer numbers they wish to maintain, based on the current levels for April 2011. The priorities for this Government have been education, health and police numbers. All Departments will face challenges as a result of the funding settlement, but those commitments have been given to date.
	It is important-these are my final two points in response to those that were raised-that we get better efficiency from the system. We talked about that this morning in the Home Affairs Select Committee and we have mentioned it in the debate today-it was mentioned by the hon. Member for Chesterfield and my right hon. Friend the Member for Leicester, East. I refer hon. Members to the high-level working group report that we published yesterday, which aims to get £540 million of efficiencies out of the system within the next three years-I have made a commitment that the police can keep those efficiency savings to put into front-line services. Those efficiencies are being sought through better procurement, for example. I think that it is madness that we have 43 individual forces buying body armour. It is madness that we have 43 forces buying vehicles, having air support, looking at forensics or getting IT. It is not a cut to combine those elements into one contract to get the best value out of the buying power-it is an efficiency that releases money that we can put into other services.
	Similarly, the hon. Member for South-West Devon mentioned back-office services. There are co-operations and collaborations that we can do and we have considered mandating some of them to get value out of the system. We can, particularly in smaller forces, get better use of personnel, HR and a range of other matters by having that back-office support without having formal mergers.
	I put down a clear challenge yesterday on the question of overtime for police. We are spending an awful lot of money on overtime and with better deployment, use of special constables and some scrutiny of overtime we can save money and can, I hope, save £70 million.
	I am conscious of the time, so my final two points relate to voluntary mergers. We have made it very clear that, following the difficulties of the merger debate several years ago, the White Paper published before Christmas set a framework for voluntary mergers. The people involved can merge if they want to and they will have the support to do so, but they will need the support of the chief constable, the authority and, ultimately, the public who they serve. To help that process, we have put in place a £500,000 fund up front to help with some of the costs of preparing for mergers. That is available to be drawn down and applied for now and will be until April of this year.
	We have also said that we will consider one of the blockages to mergers, which is council tax precept equalisation. We are happy to consider how we can work through that now and in the longer term with my right hon. Friend the Secretary of State for Communities and Local Government. There is a wish to move the mergers forward. They can save resources, but they have to be voluntary and locally driven.
	Finally, may I refer briefly to the roll-out of the four force pilot, even though my right hon. Friend the Member for Leicester, East is unfortunately not here? It is, dare I say it, rolling out. Forces are at different stages of implementation and are being strongly supported by ACPO in taking up that four force pilot. My right hon. Friend the Home Secretary is writing to police chiefs and chairs to encourage them to adopt the four force pilot in their local areas.
	There is a lot more that could be discussed, but time is pressing. Let me simply say that I hope that Members will approve the grant today for £259 million extra for next year. I hope that-dare I say it-that the Opposition will support us in that commitment and will not renege on it, whatever happens in any potential election. I believe that we have strong financial base for police funding, strong reductions in crime and strong police numbers. I accept, however, that specific issues need to be addressed, which we will consider and reflect on. I commend the grant to the House.
	 Question put and agreed to.
	 Resolved,
	That the Police Grant Report (England and Wales) for 2010-11 (HC 278), which was laid before this House on 20 January, be approved.

Local Government Finance

John Denham: I beg to move,
	That the Local Government Finance Report (England) 2010-11 (HC 280), which was laid before this House on 20 January, be approved.

Madam Deputy Speaker: With this we shall discuss the following motion, on council tax:
	That the draft Council Tax Limitation (Maximum Amounts) (England) Order 2010, which was laid before this House on 20 January, be approved.

John Denham: Before I come to the main body of my remarks, may I say that it was and is the intention that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stevenage (Barbara Follett), should reply to the debate? Timings in the House are uncertain and she will be dealing with an Adjournment debate in Westminster Hall for half an hour. I hope that it will be acceptable to you, Madam Deputy Speaker, and to the House if she replies to the debate-she has undertaken much of the individual correspondence and meetings with local authorities and she might be in a good position to respond to particular cases that are raised.
	Before I discuss the good financial settlement that is on offer for councils again this year, I want to draw the House's attention to the 2010-11 Housing Revenue Account Subsidy Determination that the Government have issued today. It confirms that next year's local authority average guideline rent increase will be set at 3.1 per cent., not 6.1 per cent. as was previously agreed, because the Government believe that the previous increase would not be fair or affordable for tenants. Those considerations have always been our priority, and that will not change. What we have put in place this year will not mean steep rent increases for council tenants in the next few years.
	The same concern about affordability has informed the decision that was announced by my hon. Friend in November, that the Government were capping the police authorities of Cheshire, Leicestershire and Warwickshire because of previous excessive increases. Cheshire and Leicestershire have accepted the budget caps that we have proposed, whereas Warwickshire exercised its right to challenge. After careful consideration, I have laid an order for the House's approval to set Warwickshire a maximum budget requirement of £90,395,000 for 2010-11. The intention is to limit all three authorities to the equivalent of a 3 per cent. increase in council tax over 2009-10 and 2010-11. No other capping decisions have been taken for 2010-11, but we will not hesitate to cap excessive increases that have been set by individual authorities, if necessary.
	Let me address the main subject of the debate-the financial settlement for local government. This is the final year of the first ever three-year settlement, which involves an £8.6 billion increase over three years, with an average increase of 4 per cent. over each of the three years and of 4 per cent. again for the coming year. The increase for this year is made up of a 2.6 per cent. increase of formula grant, bringing the total to £29 billion; a £5 billion area-based grant, which includes funding for the supporting people programme, the working neighbourhoods fund and the rural bus subsidy; and specific revenue grants of £42.2 billion, which includes, for example, the dedicated schools grant. Every council will receive an increase in funding.
	This year's settlement comes on the back of a 39 per cent. increase in real-terms funding in the decade up to 2007-08. In that decade, power and responsibility were transferred to councils, giving them greater stability, freedoms and flexibilities. Almost £6 billion has been moved into such budgets with no strings attached. The performance framework has been slimmed down from 1,200 targets to fewer than 200. Next year, councils will also gain responsibility for commissioning education and training, which will be worth a further £7 billion.

Gisela Stuart: My right hon. Friend mentions that councils are free to spend their money with fewer strings attached, but does he expect councils to take more responsibility? Does he have a view on Birmingham city council's inability to submit its accounts in such a way that the Audit Commission is able to sign them off? The council has had to waste £60,000 just to have the books re-audited to satisfy the Audit Commission.

John Denham: My hon. Friend raises an important point. We had occasion, before Christmas, to raise concerns with Birmingham city council, which, on its own say so, had failed to use the working neighbourhoods fund money in a timely manner. It is the right direction of travel to give freedoms to local authorities, but we have to make it clear that with those freedoms and flexibilities comes the responsibility to use public money well and wisely for local people.
	The Government's record on funding is one of real achievement and real confidence in local government. There has been real change on the ground, backed by real investment. I suspect that this debate might not attract huge public attention across all the media, but it will be followed closely in council chambers across England. In this week, next week and the week after, councillors will meet in town halls and civic centres to set council tax. They will be considering the coming year and the years ahead. They will follow our debates with interest, not least because of the looming election and the possible consequences for local councils and council tax payers.
	This Government's support for local government is not in doubt. The settlement comes on top of a 39 per cent. increase in real-terms funding that compares with the 7 per cent. real cut in the final four years of the previous Conservative Government.
	I reject the claim in yesterday's edition of  The Daily Telegraph from 35 Conservative council leaders that low council tax increases this year have nothing to do with the Government. They said that they had
	managed to keep taxes low in our authorities despite the efforts of John Denham and his department.
	Those councillors should be grateful. In January last year, the Leader of the Opposition proposed cutting my Department's budget by £1 billion, of which it is certain that £240 million would have come from council budgets. So those 35 local authority leaders should at least be grateful that I protected them from the policies of their own political party.

Susan Kramer: The Minister is vaunting the significant amounts of additional money that his Government have made available, but is he aware that some councils are outliers, whose increases in cash per head can be counted in pennies? Richmond is a good example, with an increase of 87p per head. Many councils, like Richmond or Kingston, have had to go deep into their pockets to fund primary school places because Government help has been so limited. The number of children affected is very significant.

John Denham: I do not agree that Government help has been limited. It is possible that when my hon. Friend the Minister winds up, she will be able set out how much Richmond has received over the years. However, I acknowledge that there is an underlying point, and that it is an inescapable part of the settlement. Almost inevitably, the funding formula that we have will reveal that some authorities are further from the formula target than others. Each year, the grant settlement is designed to make progress towards that target, but we must have a floor system that regulates the rate of change that takes place each year. Some authorities are affected by that, but it is very difficult to design a system that does not have some element of that sort.

Brian Iddon: I realise that we are moving towards target according to formula funding, but is it right that my authority should lose another £5 million this year because it is below target? That comes on top of the millions that we have lost already. Wandsworth is to receive an additional £51.653 million next year, and Kensington and Chelsea £10.061 million. I put it to my hon. Friend that my constituents are some of the poorest in the country.

John Denham: The increase in Bolton is something like £13 million in the coming year. That is a significant amount of money, as my hon. Friend will recognise. The application of the funding formula requires a floor mechanism to regulate the pace of change towards the target that the formula produces. It has been widely discussed, and he is perfectly right to produce anomalies or examples that he thinks are unfair to his constituency. However, I do not accept that they are anomalies, as the system for regulating the pace at which we move towards target is broadly agreed across the House. I am pleased that his authority has been able to benefit this year from a significant amount of money.

Phyllis Starkey: rose-

Andrew Pelling: rose-

John Denham: I shall take a question from my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey). I shall take an intervention from the hon. Member for Croydon, Central (Mr. Pelling) later, after I have made a bit more progress.

Phyllis Starkey: My hon. Friend talks about floors and ceilings. Does he agree that, although councils, including my own, are ready to complain about a ceiling if it means that they do not receive as much extra grant as quickly as they might wish, they rarely complain about a floor, as that means that they do not lose grant as quickly as they might fear?

John Denham: My hon. Friend may be aware that her local authority has received an extra £18 million this year. She makes a very valid point, but the reaction that she describes is perhaps an inevitable part of human nature. There will always be more complaints from those who believe that they should have got more than there will be praise from those who have been protected by the system. She is absolutely right to make that observation. My firm belief is that not only in this year, but in previous years, the Government have worked hard to get the balance right between the ceiling and the floor, to ensure that the pace of change is reasonably predictable and understandable by local authorities.
	I was speaking about how I resisted the call of the Opposition last year to cut my Department's grants to local authorities by several hundred million pounds. The councillors who wrote to  The Daily Telegraph may have been embarrassed by the truth, which is that the councils that have loaded most burden on to council tax payers have been Conservative. Of the 50 councils with the highest increases in council tax over the first 10 years of this Government, around 30 are Conservative-controlled. Labour controls just five.
	The current settlement means that we can expect the average band D council tax increase to fall to a 16-year low. Many councils have already indicated that they plan for modest council tax increases or none at all, including all eight London Labour councils, which have committed to a council tax freeze while protecting front-line services. Our expectation this year follows last year's average increase of just 3 per cent., the lowest since 1994-95.
	That is good news for council tax payers from the Labour Government. What would they get from the Opposition? An apparently attractive but empty and unfunded promise. On 30 September 2008 the right hon. Member for Witney (Mr. Cameron) told the BBC that council tax would be frozen for two years under a Conservative Government. The Conservative party press release of 29 September 2008 said that the cost would be £500 million in the first year and £1 billion in subsequent years. It said that that would be funded from cuts in advertising and consultancy budgets.
	Latest costings show that the Opposition have seriously underestimated the cost. A two-year freeze starting this year would cost £1.970 billion-£650 million in the first year, and £1.320 billion in the second year and every year after that. Even on the Opposition's own figures there is a £470 million gap, so I wonder whether that is likely to happen.
	On 7 January the Leader of the Opposition told the BBC:
	No, no we have a pledge to do that-
	the two-year freeze-
	because we found the money to do that by cutting government advertising and government consultancy.
	Asked by the BBC's admirable Evan Davis:
	Hang on, why don't you cut the government advertising and other budgets in order to reduce the deficit, not council tax?,
	the Leader of the Opposition insisted that the freeze would go ahead. So would it happen? Is it a promise, or merely another vague aspiration? Apparently it will go ahead.  [Interruption.] Well, those taking part in council tax debates throughout the country need the answer today.
	Last Sunday, the shadow Chancellor had a different use for cuts in advertising and consultancy.
	To reduce the deficit,
	he said,
	we can move quickly on the advertising budget, the big government consultancy budget.
	Yesterday, asked by the BBC's equally admirable Nick Robinson about cutting spending to cut the deficit, the hon. Member for Tatton (Mr. Osborne) said:
	We pointed to the advertising and consultancy budgets.
	Which is it? Cuts in advertising and consultancy to reduce the deficit or to reduce council tax? It cannot be both. The House and local councils need to hear some answers today before promises are made at local level. There have been many candidates from Opposition parties dropping leaflets through letterboxes over the past few weeks promising a freeze in council tax without any explanation of how even part of it is to be funded.

Andrew Pelling: Will the Secretary of State give way?

John Denham: In a moment.
	The Opposition's council tax plans are, as  The Observer said on Sunday, mired in confusion.
	We also need to know when the freeze will start. If it does not start until next year, there is another problem. As the pre-Budget report makes clear, advertising and consultancy will be cut by this Government by £650 million in 2012-13 as part of our plan to halve the deficit, so there is no money in the coffers to pay for the second year of the proposed council tax freeze. There is at least a £1.120 billion black hole in the Opposition's local government spending plans in the first two years, and the same amount every year after that.

Justine Greening: The right hon. Gentleman is doing a great job of setting out to the public the fact that we will help councils freeze council tax, whereas his Government will not. Perhaps he can explain whether it is his proposal to go ahead with another revaluation shortly.

John Denham: We have no plans or preparations for a revaluation of council tax.

Bob Neill: What about the database?

John Denham: Oh, the database! A standard, routine contract is put out to tender every few years to update the valuation database in the normal way; that has nothing to do with council tax revaluation. I wrote to the hon. Member for Putney (Justine Greening) after she claimed in the Sunday Express that the database was evidence of secret plans for a revaluation of council tax. She never replied to my letter, and I am surprised that the Opposition continue to raise the issue.

Justine Greening: Will the right hon. Gentleman give way?

John Denham: No, because I am just going to make the point- [ Interruption. ] The hon. Lady had the opportunity to answer, so I shall make some progress on the statement- [ Interruption. ] She had an opportunity to explain what she cannot explain, which is how council tax revaluation would be paid for. I shall carry on, because we need to deal with more aspects of the settlement.

Andrew Pelling: Will the right hon. Gentleman give way?

John Denham: I shall give way to the hon. Gentleman, because he has been asking for some time.

Andrew Pelling: The Secretary of State is clearly hitting the target as regards the Conservative party's rather soft position on those issues, but, nevertheless, are not his comments a real comment themselves on the relationship between central and local government? This Government have not released local government to pursue its own financial affairs. The fact that national parties are talking about advertising in specific councils shows that local government is still far too dependent for its finances on national Government.

John Denham: The hon. Gentleman might have welcomed the extra £20 million in all grants that his local authority will receive next year. The fact is that over several years there has been a process of devolving power to local government, of reducing ring-fencing and targets and of transferring responsibilities to local government-and we will continue to make progress in that direction. I shall say more about that in a moment.

Paddy Tipping: Will my right hon. Friend give way?

John Denham: I shall, but then I must make some progress, because I know that a number of hon. Members wish to speak.

Paddy Tipping: What advice would the Secretary of State give to Tory-run Nottinghamshire county council, which is determined not to increase its council tax and told me that it could do so because it was going to receive an increased grant from a forthcoming Tory Government-if there were one?

John Denham: I would say to that county council that there is clearly no source of money to pay for the promises, which are being made throughout the country, of a council tax freeze. We saw the same situation with married man's tax allowance at the weekend with spending-

Madam Deputy Speaker: Order. Perhaps the Secretary of State could now concentrate on the proposals that the Government are putting forward.

John Denham: You have been characteristically generous, Madam Deputy Speaker, and I shall make progress.
	We are happy to be judged on our record of steadily increasing investment and greater freedoms. This settlement, which underpins our ambitious vision for local government, is how we will not only protect but continue to improve local public services, despite the tighter financial climate. Local government has a good record on making efficiency savings, but the truth is that the really hard challenges have still not been tackled consistently in every council and in every area. Local people will rightly be intolerant if they are told by their council that front-line services will be cut when it has not taken the tough decisions to introduce shared services, sharing senior staff with other authorities, primary care trusts or other providers, or made the best use of public assets.
	The new task force that I have established, led by Steve Bullock, the mayor of Lewisham, and Richard Leese, the leader of Manchester city council, will report by the end of the month on how well-led authorities can protect and improve services while meeting the new demands for greater efficiency.

Mark Field: The Secretary of State will realise that for many local authorities one of the biggest clouds on the horizon is the census in 2011. Many of us, particularly those of us in inner-city boroughs, recognise that there are great concerns about the rigour with which the census is being put in place, and that that will have a major impact on the grants that are made not just this year but for some years to come. The issue applies to hon. Members from all parts of the House. Will he explain what the Department is doing to ensure that the census is as rigorous as possible in order to ensure that there is a fair division of the spoils for many years to come?

John Denham: The hon. Gentleman makes a perfectly fair point. Usually in this annual debate, the concern is that population figures are out of date, as opposed to about to be updated. The census is therefore enormously important, as is the ongoing work, on which the Office for National Statistics is consulting, about better ways of capturing more rapid short-term changes in population of the sort that we saw in the middle of the last decade. His point is well taken and well made, but I assure him that everybody concerned with the census is working enormously hard to ensure that it produces the accurate basis on which future local government projections can be carried out.

Karen Buck: Will my right hon. Friend join me in encouraging the hon. Member for Cities of London and Westminster (Mr. Field) to join the London Regional Select Committee, because we are engaging in an in-depth study on the census, working with various Departments, and we are missing representation from the Opposition Benches?

Madam Deputy Speaker: Order. We are certainly not straying into the subject of Regional Select Committees.

John Denham: Having set out the challenge to local government, whereby we need to ensure that every taxpayer's pound works as hard it can, I should say that it is obviously important that the Government support local councils in making the necessary changes. That is why, with local authorities, this Labour Government have pioneered the Total Place initiative, which looks at all public service spending in each area and how it can best be used, together with local council and councils, with their democratic mandate, to ensure that local services respond to local needs.
	I welcome the Opposition's recent belated recognition that the extension of further scrutiny of health and other public services is needed to equip councils with the powers that they need to act decisively on behalf of local residents, including the powers to scrutinise, influence and shape other services. In future, this means that local government will not just be overseeing its own services; in addition, councillors will be able to challenge how all local services are delivered, regardless of the provider. As the pre-Budget report confirmed, Total Place is not just a direction of travel but the future of local government and local public services under a Labour Government. The Opposition may make a rhetorical commitment to Total Place, but we have shown in past debates where their polices will lead: a postcode lottery as entitlements and inspection are abandoned, and two-tier Ryanair councils providing a most basic service and leaving only those who can afford to pay able to access a decent service. That is not the kind of localism that I want to see.
	This is a good funding settlement. We have delivered average increases of 4 per cent., giving councils scope not only to keep council tax down but to deliver the crucial services on which local residents rely. I think I have shown that some of the promises being made by the Conservatives are unfunded and cannot be believed, and they need to be exposed as such.

Madam Deputy Speaker: I now have to announce the results of Divisions deferred from a previous day. On the motion relating to EU enlargement strategy, the Ayes were 403 and the Noes were 20, so the Question was agreed to. On the motion relating to infrastructure planning, the Ayes were 231 and the Noes were 196, so the Question was agreed to. On the motion relating to financial management, the Ayes were 230 and the Noes were 202, so the Question was agreed to.
	 [The Division lists are published at the end of today's debates.]

Justine Greening: I thank the Secretary of State for outlining the Government's proposals on local government finance. I think that we all accept that the formula as it stands is extremely complicated. When the Under-Secretary of State for Communities and Local Government, the hon. Member for Stevenage (Barbara Follett), outlined it in this Chamber at the end of last year, there was some humour in the fact that the guide that now goes with the formula claims to replace the previous plain-English-speaking guide. Local councils find themselves having to deal with an incredibly complicated formula.
	The three-year local government finance settlement has been important for councils, and we recognise that it is important for them to be able to plan ahead. However, this is the last of the three years, and the Government have effectively delayed-many people would suspect cancelled-the comprehensive spending review, which could have given councils the framework for the next three years and an idea of what funding there may be. We now seem unlikely to get that before the election. If I am wrong about that, I am sure that the Secretary of State will intervene.  [Interruption.] He indicates that it is not in his hands; it will be worrying for local government to know that he is not pressing to have more certainty in future.
	This is an important matter. It is not just councils that need to understand the funding regime under which they will be operating. As the Secretary of State clearly demonstrated, it is important for families and local communities to understand the level of council tax and how the local government finance settlement could mean changes in their council tax bills, particularly as we are possibly still in the deepest, longest recession in many years.

Hazel Blears: The hon. Lady has started her contribution with a lot of talk about certainty. I am sure that she would welcome my excellent Labour council's decision to give our community certainty with a council tax freeze. She is right that certainty is important for families and councils, so will she tell us here and now when her council tax freeze will start, when it will end and how it will be paid for? The country and the public have a right to know.

Justine Greening: We have already published all those data. I am sure that it is wonderful for Ministers to try to pick holes in them, but in fact they seem to be taking some of our suggestions on clamping down on waste. Having only a few months ago challenged us by saying that it was a case of investment versus cuts, they now seem to accept that we need to trim back public expenditure.

Adrian Bailey: Will the hon. Lady give way?

Justine Greening: I will not, actually. I have not even quite finished dealing with the intervention by the right hon. Member for Salford (Hazel Blears). As she said, there is a genuine appetite for a council tax freeze. It is just a shame that her party's Government cannot recognise that. We want to help local government deliver that, but her party wants to undermine it.
	There was one question that I did not get to put to the Secretary of State. He would not rule out the revaluation that is coming down the track and could mean families paying hundreds of pounds extra.  [Interruption.] Is he ruling it out? He says that there are no plans, but we have all heard the statement There are currently no plans in the past when we have known that there were. Preparation for the revaluation is well under way, and the Secretary of State's own local government body, the Labour group of the Local Government Association, in its document Putting Fairness First, does not just talk about a revaluation but states that on top of that:
	At the very least, the council tax needs rebanding. The addition of more bands at both the top and the bottom of the scale will help to make it a more genuinely progressive tax.
	[Hon. Members: Hear, hear.] We seem to be getting messages from Labour Back Benchers-perhaps the Secretary of State can confirm this-that Labour wants to continue adding bands and pushing up council tax for people across the country.

John Denham: I repeat to the hon. Lady what I said earlier. We have no plans, and we have made no preparations, for a revaluation. With respect, she should really stop claiming that we have. We have said that often, and the constant repetition of something that is not true does not make it true.

Justine Greening: People reading  Hansard tomorrow will see from that response that there is no ruling out of a revaluation or of more bands. We all know exactly what is going to happen if the British public are unlucky enough to face this Government being in power after the next election.

Phyllis Starkey: Will the hon. Lady give way?

Justine Greening: No, I am not going to give way-not today, thank you.
	What we need is a new approach to local government. We need an approach of localism that will move away from the trend that councils have seen under this Government, which is more micromanagement, more reporting upwards, less ability to decide local priorities and more top-down diktat from Westminster. What people actually want in their local communities across Britain is the chance for their local council to spend money on their local priorities, not on the priorities that are so often set by the Secretary of State.

Gisela Stuart: I would be grateful if the hon. Lady helped me. She said that the data on the council tax freeze have all been published, but I am at a loss as to when the freeze will start-I may have missed her telling us that. Will she say very simply, to help a simple person, when the promised Tory council tax freeze will start?

Justine Greening: We have always said that it would start in the first full financial year after the election.

Madam Deputy Speaker: Order. May I please bring the House back to order? We are discussing the Government's proposals.

Justine Greening: That is very helpful, Madam Deputy Speaker. It is interesting that Government Back Benchers are pressing the Opposition on when a policy will start, but will not admit when the next election will be. Pursuing that line of argument is disingenuous.
	There is no doubt that council tax will be one of the most important things for people in today's debate. The bottom line is that whatever the Secretary of State says about funding for councils across the country, under Labour, council tax doubled from 1998-99. In fact, people are being charged £14 billion a year more in council tax than when Labour came to power. That is real money taken out of people's pockets that they cannot spend on what they otherwise would have liked.
	The Under-Secretary of State for Communities and Local Government, the hon. Member for Stevenage (Barbara Follett), came to the Chamber before Christmas and claimed that a 3 per cent. settlement-a 3 per cent. increase-was somehow reason for celebration among people who were, by and large, getting no pay rise in the private sector. If that 3 per cent. increase goes through, it will add £42 to the bill of an average band D home and push bills to more than £120 per month.

Karen Buck: Does the hon. Lady share my concern that while she is focusing on council tax-I agree that nobody wants to pay more tax than they have to-there is a risk that we are missing the impact of charges? My local authority, Westminster, is in the process of raising an additional £7 million from parking charges alone, and it is putting up meals on wheels charges by 10 per cent. and introducing a new charge of £20 for the disposal of bulky items, which leads directly to fly-tipping. Of course, those costs fall directly on people to whom no rebate is available, with all kinds of unintended consequences for their purses.

Justine Greening: The Housing Minister has left the Chamber, but I propose that the hon. Lady talks to him. Only last year he was saying that only one in five councils were actually charging for the services that they could charge for. The pressure for councils to charge is coming from her Government, not from councils. Councils across the country are being asked to pay for services and to fund more and more mandates from national Government without being given the money to do so. They have had one part-funded initiative after another.
	I want to return to council tax, because there are people in this country who have been unable to afford council tax increases. A typical pensioner couple, for example, now pays £685 more a year on a band D property than they paid in 1997-98. In fact, only half of eligible pensioners claim the council tax benefit to which they are entitled. Ministers ought to focus on those issues. The Secretary of State was reluctant to answer any of my questions, but if we have another term of Labour in office, households across the country will see even more council tax increases coming down the track, because of more bands and a revaluation. Ministers never rule the latter out, because it is clearly going to happen, which is why we need a council tax freeze.

Julia Goldsworthy: The hon. Lady is doing a good job of highlighting the problems with the council tax, which since its invention has increased at above inflation each year. How can she reconcile all these problems with the council tax while defending its existence to the hilt?

Justine Greening: I guess that we would all love to know whether the Liberal Democrats would go ahead with their local income tax policy-[Hon. Members: Yes.] Well, it was not exactly popular at the last election, so that is probably good news for many hon. Members.
	It is not only council tax rates that have been going through the roof under Labour. One of our biggest concerns is that this local government finance settlement is principally underpinned by receipts from business rates. The Government are about to press on with a business rate revaluation, which could fundamentally destabilise the main source of revenue for local councils and their services-

John Denham: Will the hon. Lady give way?

Justine Greening: No, I wish to make some progress. That revaluation comes on top of the business rate rises that have been seen across the country, at a time when local companies can ill afford them-

John Denham: Will the hon. Lady give way?

Justine Greening: No, I will not give way.

Alan Whitehead: Will the hon. Lady give way to me?

Justine Greening: No, I really must make some progress-

Madam Deputy Speaker: Order. The hon. Lady has clearly decided that at present she will not give way to anyone.

Justine Greening: I am trying to respond to the Minister. We have some real concerns about business rates and we are worried that if Ministers go ahead with the revaluation they have planned it will destabilise one of the key revenues for councils-

John Denham: Can the hon. Lady be clear that she is suggesting, as she did in questions last week, that the revaluation should not go ahead, knowing as she does that 60 per cent. of businesses would see an average of a £770 rate increase from April?

Justine Greening: The Secretary of State fails to recognise that the decrease for those companies is funded by increases for other companies. If the Government had looked at the impact assessment of whether those companies could afford the increase, he would be on stronger ground. The reality is that those getting the biggest rises far outweigh the number getting the biggest decreases. In eight out of nine English regions, more companies will see a 20 per cent.-plus rise than will see a 20 per cent. fall. The Secretary of State cannot claim that the Government are pursuing a strong policy when they have not even bothered to look at how the 40 per cent. of companies that face a rise will manage to pay it. If the Government's calculations are wrong-not that they particularly have any-business rate income could be destabilised.
	It would be better to allow all companies to enjoy the minor reduction that they would all get from the inflationary decrease that would have resulted from the multiplier, had the revaluation not gone ahead. Instead of playing party politics, the Secretary of State should get out to the regions that will see the biggest losers and talk to companies about how they will afford to pay. Those increases alone could stifle the recovery before it gets going.

Brian Iddon: In Bolton, the regional development agency has been very helpful to local companies. This evening, MPs from the north-west have been invited to a meeting of the Northwest Development Agency. What can I tell the agency about the likelihood that it will still exist in the unlikely event that the hon. Lady's party wins power on 6 May?

Justine Greening: We have said that it will be up to local authorities and local regions to decide whether their regional development agency has been effective. In some parts of the country, the feedback is that the agency has been effective, but in others it has not. It should be down to local areas to decide how they want to organise regeneration.

Hazel Blears: The hon. Lady's party has said that it would fund the council tax freeze partly by abolishing unelected regional tiers of government, so she has to be straightforward and honest. Will she fund the council tax freeze by abolishing excellent bodies such as the Northwest Development Agency? Again, we have a right to know.

Justine Greening: The right hon. Lady has completely misunderstood the funding for the council tax freeze. She has even, within 10 minutes, contradicted the Secretary of State when he said that, apparently, he thinks that there is not enough in our advertising budget for our policy, which of course there is.

Andrew Pelling: Will the hon. Lady give way?

Justine Greening: So our policy is absolutely funded.

Andrew Pelling: Will the hon. Lady give way?

Justine Greening: That is one of the reasons we would urge Ministers to match our council tax freeze, instead of saying that they want to see council tax raised when people can least afford it.
	The settlement is part of a broader failure by the Government to work with local authorities. Under the Government, they have faced extra burdens, not just from top-down diktat, but because they have been able to spend less of their money as they would have wanted. That is one of the reasons for the pressures on council tax. In 1996-97, 22 per cent. of local government revenue expenditure was financed through council tax, but by 2006-07, that had risen to 26 per cent.

Andrew Pelling: Will the hon. Lady give way at that point?

Justine Greening: Councils are under so much pressure that they are being pressed to go out to their local communities and fund services by raising council tax. Local authorities now have a raft of extra measures to deliver that have never been properly funded. In fact, there is a live one here in London on concessionary bus fares- [Laughter.] I am sure that many Labour Members find that entertaining- [Laughter.]

Madam Deputy Speaker: Order.

Justine Greening: Thank you, Madam Deputy Speaker.
	That is of concern to many London councils, which face a shortfall of on average £1 million per council because the Transport Secretary has failed to-

Andrew Slaughter: On a point of order, Madam Deputy Speaker. The hon. Member for Croydon, Central (Mr. Pelling) was on the Conservative Benches a little while ago-as a result he increased the number of Conservative Back Benchers by 50 per cent.-but he is now on the Labour Benches. I think that he ought to be heard at some point. I do not know where he is going to go next.

Madam Deputy Speaker: Order. That is not a point of order for the Chair, and the hon. Member for Croydon, Central (Mr. Pelling) is in fact an independent Member of the House.

Justine Greening: If the hon. Member for Croydon, Central (Mr. Pelling) wants to intervene, I will be delighted to give way.

Andrew Pelling: I am sure that the hon. Lady simply could not see or hear me-that is why I came across to the Labour Benches. I am grateful to her for giving way. May I compliment her on dealing with the shells that have been dropped by some of the heavyweights who have decided to take part in this debate and have a go at her? May I ask her two questions about the points that she has raised? She mentioned the heavy burden of local government taxation, and it is welcome that any incoming Conservative Government would freeze the tax. Does she feel that perhaps the council tax has come to the end of its ability to take additional taxation increases? Given that she is a Member of Parliament for a south London constituency, does she sympathise with some businesses that feel that it is a little unfair that the supplementary business rate that they are paying goes into Crossrail? There might be important things to do in south London communities using some of that supplementary business rate.

Justine Greening: The hon. Gentleman raises some interesting points. The first was about council tax and the pressures to increase it further. It should be up to local residents to decide whether council tax rises are affordable. That is one of the reasons Conservative Members have talked about providing the ability for local residents to hold a referendum if they believe that council tax rises are unaffordable.
	The hon. Gentleman also raised a point about Crossrail and supplementary business rates. The Government recently brought through the Business Rate Supplements Act 2009, about which we expressed the concern, when it passed through the House, that it could lead to extra burdens on companies. So I share his concerns about the concept of supplementary business rates-in fact, we have said that we want councils to be able to go in a different direction. We want to give them the power to levy a business rate discount, rather than a supplement. We need to give councils the ability locally to help regenerate their local economies, and I will come later to some of the incentives that we would like to see.
	As I am sure that the hon. Gentleman recognises from his own local council in Croydon, councils currently spend far too much time micro-managing Government initiatives and not enough time being able to tailor what they are doing locally to local community priorities. In fact, 36 out of 52 revenue grants for local authorities are ring-fenced, so it is simply not correct to say that local authorities are being given the freedom that they need to deliver for their local communities as well as they can. We would very much like the Government to move away from ring-fencing grants and towards giving councils more freedom to deliver on local priorities as they see fit.
	Only today we heard the Prime Minister talking a good game, but the reality for local councils is that they do not see that change happening on the ground. As I mentioned to the hon. Gentleman, there is very little incentive in the funding formula for councils to deliver for their local authorities. Total Place has started to provide some of the fact base, as it were, for councils to be able to do so, but we should not kid ourselves. We are at the beginning of a long road towards councils being able to get out there and not just work with other local providers, such as the NHS and the police, and with the Department for Work and Pensions, but, more broadly, deliver value for money for their residents.

Adrian Bailey: I have listened with interest to the hon. Lady's arguments. In the absence of ring-fencing, could she tell me whether a potential Conservative Government would allow local authorities to raise their council tax to any level, without any action being taken?

Justine Greening: I have just said what we would hope to do on council tax. We want to give local communities the ability to set the cap. That should not be done in Whitehall. If local communities decide that a proposed rise is unaffordable, they should be able to stop it. I understand the hon. Gentleman's point, but it shows the difference between our approach, which is to trust local communities and local authorities to get on with running their own lives, and that of the Government, who take a top-down approach the whole time.

Adrian Bailey: Will the hon. Lady give way?

Justine Greening: No, I am going to make some more progress. I am conscious of the time and the fact that other Members no doubt want to express their views and represent their constituents.
	The issue is not just about giving local people more authority to hold their local councils to account on council tax rises. We also need to put in place incentives, so that local authorities can benefit when they take good decisions on providing more homes for local people. Many local councils across England and Wales would say that they are concerned at the lack of house building that has taken place, but they have had to work within a framework of top-down targets that local communities have rejected.

Andrew Slaughter: It is wonderful to hear an Opposition Front-Bench spokesperson, however sincerely or not, talking about house building. Will the hon. Lady take this opportunity to condemn Hammersmith and Fulham council, which is planning to demolish 3,500 good-quality council homes?

Justine Greening: rose-

Madam Deputy Speaker: Order. May I remind hon. Members that we are now discussing local government finance? That is the matter under consideration in this debate.

Justine Greening: Thank you very much, Madam Deputy Speaker. I was making the point that part of the funding settlement that we are talking about should reward local councils when they develop their local communities by providing new homes. We would also like local councils to have incentives, so that they are rewarded for doing a good job in developing their local economies and generating local jobs. That is why we have talked about allowing them to keep the gain from business rates that they make when they do a good job of bringing new companies and new industry into their local areas.
	Finally, it is time to say that local authorities with local responsibilities need to be more accountable. Authorities such as Windsor are already being far more transparent, as is the Mayor of London, putting all spend over £1,000 out for public scrutiny. We would like other councils to follow that measure. Indeed, I am sure that when the Minister wraps up, she will say that she, too, would like that-I am guessing that she would not want to go against increased transparency. We certainly want local councils to have increased transparency for their residents, because it is the best way to create an environment in which councils can not only have more power to deliver on local priorities, but be better held accountable by their local residents in doing so.

David Chaytor: In view of the hon. Lady's comments about transparency and accountability, can she give an absolute assurance that this Friday Opposition Front Benchers will support my private Member's Bill, the Local Authorities (Overview and Scrutiny) Bill?

Justine Greening: We are very supportive of moves to ensure that transparency is developed and improved in councils. We think that that is the best way to enable local residents to hold their local authorities to account.
	In place of the local government finance settlement approach that we heard about from the Secretary of State, we want local communities and local authorities to be given more power to deliver their priorities on the ground. We want local residents to be able to cap their council tax if they think that that is their priority, rather than having Ministers do it whether it is or not. In the earlier debate, which you were here for, Madam Deputy Speaker, a variety of hon. Members complained about the fact that their police authorities had been capped, as local people were perfectly happy to pay more-their priority was to see more police on their streets. We think that that is the right way to go: to give local people the choice, rather than have it taken away.
	Whatever the Prime Minister says this week, councils have nothing new to look forward to from the Secretary of State or from the Minister. It is more of the same when we look through this local government finance settlement. There is continued top-down ring-fencing of money that should be spent on residents' priorities, rather than Whitehall priorities. There is a continued lack of incentives for councils to develop their local communities and economies. There is continued pressure on council tax to rise, when family finances are stretched to the limit, because councils are asked to take up, on behalf of Whitehall, so many unfunded initiatives. There is continued micro-management and inspection from above, which costs money that could otherwise go into front-line services.
	The bottom line is that we need to give councils the freedom that they crave to deliver better services and better value, and to deliver on the priorities that matter most to their local communities. However, as we have heard today, for that to happen, we will need a change of Government-it will not happen under this one.

Phyllis Starkey: I want to make a few observations and I will try to be brief because I know that many hon. Friends wish to speak. Like other hon. Members, before I was a Member of Parliament, I was the Labour leader of a council under a Conservative Government. I can attest that the experience under this Government, with their attitude to local government, although there are some things that I criticise them for, is light years away from the experience of council leaders under the previous Conservative regime. It attempted to set the budget of every council in this country, a Stalinist exercise that has never been exceeded and that, I hope, will never be emulated by any Government, and that is not to mention the gerrymandering of the grant system. That needs to be said. I know I am of an age that means that I perhaps have a longer memory than the hon. Member for Putney (Justine Greening), but take it from me: this Government are in a completely different, and much better league, as regards local government and the attitude of central Government to local government. Indeed I commend the steps that the Secretary of State has taken to move the balance further towards local government, although he still has a long way to go.
	I want to make a number of remarks following the hon. Lady's speech. The way in which her hon. Friends-apart from the hon. Member for Mole Valley (Sir Paul Beresford), my fellow member of the Select Committee on Communities and Local Government-deserted the Chamber and left her in an acre of empty Green Benches is distressing. I guess that they have done that because, like me, they were somewhat distressed by the innumeracy that she demonstrated, and her lack of understanding of local government finance. That is incredibly distressing in someone who wishes to become one of the Ministers in charge of it.
	First, we are not talking about the national non-domestic rate, which is not relevant, but about the system of local government finance as it relates to the council tax. The hon. Lady must know that revaluation, unless each individual council chooses to use it as an excuse for increasing the total council tax take in their area, does not mean that everybody's bill goes up; it means that some people's bills go up and some people's go down. It is absolutely indefensible for her to continue in this way: either she does not understand it, or she is continuing to state something that she knows is not accurate.

Justine Greening: We have already had a revaluation in Wales, which did raise more council tax, so the hon. Lady should look at that example to see why we should be concerned about revaluation.

Phyllis Starkey: The hon. Lady should look at the data she cites. The Welsh Assembly-it believe it was my party, but I am not making an excuse for it-took advantage of the revaluation hugely to increase the total take. The bills went up, because it decided to increase the amount of money raised. I am distressed to have to explain this to the hon. Lady, but that is how the system works. As a former chair of finance, I know the way the system works. A council decides how much money it needs to raise from council tax in order to fill the gap between grant income, charge income and what it takes from the reserves. It decides on the total amount it wishes to raise and then it turns to the city treasurer and says, Looking at our local tax base, given the people we have in each band and so on, how much do we have to increase band D council tax to raise the requisite amount of money? It follows that if there is a revaluation, unless the council decides it wants to increase the amount raised, some people's bills will go up and others' will go down. The Welsh Assembly example, cited all the time by Conservative Members, is not an example of revaluation leading to bills going up; it is an example of an elected council or assembly choosing to increase the total take and, of course, everybody's bills going up. It has nothing to do with revaluation.

David Heath: I share the hon. Lady's experience of being a council leader under the Conservatives, so I can certainly corroborate what she said about that. Is not one of the problems with revaluation that the longer it is left, the more out of kilter it gets, so that when the resultant rises inevitably come, they are even bigger for the losers in the system? We have waited 20 years, so values are 20 years out of date. Are we going to wait for them to become 100 years out of date before somebody dares to carry out a revaluation or are we going to do the sensible thing, which is completely to change the basis of local government taxation?

Phyllis Starkey: As I am the Chair of a Select Committee and not a Minister, I can say what I feel on this matter. If we continue to have a property tax-I believe that we should-we need to revalue relatively frequently; otherwise, it becomes distorted. Then, as the hon. Gentleman says, if we make the changes, those who gain will gain a great deal and those who lose will lose a great deal. I am personally in favour of such revaluation.

Alan Whitehead: Will my hon. Friend reflect on the consequences for balancing of having a freeze on council tax? What, for example, might be the consequence in year 3 of the freeze, if it were imposed without replacing the money cumulatively lost through council tax, for central Government funding, especially if the figures were not entirely right? Unless central funding took over, would not the likely outcome be a huge avalanche of council tax rises in year 3, thereby decreasing still further the ability of local authorities to raise their own finance?

Phyllis Starkey: Absolutely. My hon. Friend is a great expert on local government finance and I entirely agree with him. What he said suggests that any Opposition proposing such a policy do not really think that they are ever going to come to power, since they would still be in power when such an enormous hike occurred, thereby becoming incredibly unpopular.
	There are other reasons why I believe the Opposition should reconsider their policy. I say this simply because I would not want my hon. Friend the Minister in any way to be tempted to take over such a policy from the Opposition. First, the whole basis of the hon. Lady's arguments rests on the supposition that the council tax is itself a problem. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) made the point that I was intending to make myself, namely that the council tax was introduced by the Conservative Government after their disastrous introduction of the poll tax. They could not go back to the rates, which in my view is what they should have done, so they opted for a poor relative of the rates.
	At least the rates had the advantage of being relatively progressive. It is not a hard and fast rule, but on the whole the bigger the property in which people live, the better off they are, and the bigger the property in which they live, the more they will pay in rates. It is also true that the bigger the property in which they live, the more they will pay in council tax, but because council tax is banded rather than being a continuous system like the rating system, the difference between what is paid by someone living in a small house and what is paid by someone living in a big house is nowhere near as great under the rating system as under the council tax system. The council tax is a much less progressive tax; indeed, it verges on the regressive.
	If the hon. Lady and her party are truly worried about the burden that the council tax places on low and middle-income households, there is a simple way of dealing with that. Increasing the number of bands would increase the burden on those in big houses and on big incomes, and-since the total amount to be raised would remain the same-it would reduce the burden on low and middle-income households. I suggest that she consider that simple method, which, once introduced, would perpetuate the improvement in progressivity from year to year without the need for further changes.
	Secondly, I want to deal with the proposal that some authorities' council tax should be frozen. The Opposition appear to be suggesting that a council that proposed to increase its council tax next year by 2.5 per cent. or less would receive a lump sum of 2.5 per cent. from the Conservative Government, in the ghastly event of their being elected. That is essentially adding to the Government grant system, but in a way that is not transparent and is in no way related to need. Effectively, it means giving money to councils if they are able to keep their council tax at 2.5 per cent. or below.

Mr. Speaker: Order. In the short time for which I have been in the Chair, the hon. Lady has expressed herself with great force and eloquence on the subject of the policy of the Opposition. I have just looked at the terms of the main business. We are supposed to be debating the question of whether to approve the Local Government Finance Report (England) 2010-11 and the draft Council Tax Limitation (Maximum Amounts) (England) Order 2010. I think that further ruminations on the policy of the Opposition would probably be outwith our scope, however enjoyable or stimulating they might be for the hon. Lady.

Phyllis Starkey: Far be it from me to complain about your spoiling my fun, Mr. Speaker. I shall save the remainder of my interesting analysis for other occasions. I believe that the House has got the gist of my view. The suggestions that were advanced at some length by the hon. Member for Putney were indeed risible, and I am not surprised that most of her hon. Friends left the Chamber in order not to subject themselves to her speech.

Julia Goldsworthy: I welcome the opportunity to discuss the settlement. When I saw that the Secretary of State in his place I thought that his presence might raise the tone of the debate, but so far it has not really done so, although I am sure that the hordes of Labour Members sitting opposite me have contributions to make.
	The debate concerns the third year of a three-year settlement. Notwithstanding the banter that we have heard, it contains nothing particularly controversial. Many councils were very happy to have a three-year settlement. It has been delivered according to plan, and given what has been going on in the wider economy, I think that a number of them were grateful for the stability that it offered.

David Heath: We would have been very pleased to have had that stability in Somerset, were it not for the incoming Conservative county council deciding that an increase in the money from the Government was a signal for it to cut massively the services it provided to Somerset residents. I cannot quite work out that paradox.

Julia Goldsworthy: My hon. Friend is right: that is an odd paradox. One would have thought that any incoming council would have been focused on meeting the needs of the people who had elected it, rather than on cutting services to them.
	Let me speak a little more widely about some of the challenges councils have faced over the past three years, which is the period the settlement has covered. Councils have been feeling the pinch. The credit crunch has had an impact not only in terms of putting pressure on the services that they have to deliver-if there are more vulnerable people, councils face increased pressures in trying to meet their needs-but in terms of the fees and charges they collect. They have already been feeling the squeeze, therefore, as the Minister for Housing acknowledged last year when he said this was a tight settlement. It would therefore be unfair to say that councils are in a luxurious position, given everything else that has been going on in the wider economy.
	The Secretary of State rightly highlighted in his speech his concern about the impact rent increases might have on council tenants, and the impact of council tax rises on council tax payers, but we must also remember that there are huge pressures on councils, which in turn has an impact on the services they provide to vulnerable people. A number of terrible stories have been reported in the media recently, not least the case in Edlington. The knock-on effect of that case and the baby P case has created a massive pressure on authorities' services. I know from talking to people delivering children's services in my own local authority in Cornwall that they have resulted in a massive increase in referrals, which they have to deal with, and they have also had a very negative impact on staff morale and turnover. Therefore, a lot of councils have fewer staff trying to deal with an increased burden. It looks as though those pressures will increase in the future, because the Government's proposals to give councils the responsibility for delivering free personal care to people with high levels of need living at home is a cause for concern to a lot of councils. They believe that they are being asked to part-fund that by savings that have already been accounted for, or that they may not be able to deliver that care. This is part of a long history of the Government giving councils responsibilities for something that the Government then fail to deliver on properly, such as concessionary bus fares and free swimming. The delivery of personal care will be another example of councils finding that their resources will be stretched further to cover more responsibilities, while they are not necessarily given the resources to deal with that.
	I want to emphasise, too, that we face uncertainty. The Secretary of State made great play of the certainty that his Government had given to local councils through the three-year funding settlement, but he said absolutely nothing about what will happen in the next financial year-not the one that has been dealt with by the settlement, but the subsequent one. Basically, councils are completely in the dark about what kind of situation they will be operating in. The spending review was due last summer, and we do not now know when it will appear, but it certainly does not look as though it will do so until after the election. The closest we got to having any information about that was in the pre-Budget report, when the Chancellor said that public spending as a whole would be frozen between 2011-12 and 2014-15.
	The Institute for Fiscal Studies has today published its Green Budget, in which it tries to tease out some of the implications of a real-terms freeze for Departments that have not been singled out by any party for protection. The following quote from the summary to chapter 8 of the Green Budget points out that
	spending on debt interest, social security and other 'annually managed expenditure' is likely to grow in real terms. Keeping to these overall spending plans would therefore require deep cuts in 'departmental expenditure limits' (DELs)-Whitehall spending on public services and administration.
	It also said that the Government had
	promised to 'protect' spending on priority areas, including health, schools and overseas aid.
	Once one takes out the protection of those areas and the increases in expenditure, the implication is real-terms cuts. The book says
	These other areas-including defence, higher education, transport and housing-
	and, of course, local government-
	would likely see their budgets cut by 12.9 per cent.-
	in real terms-
	on average over the two years or by £25.8 billion.
	The book also extrapolated the Conservatives plans on ring-fencing over the four years, saying that
	if the Conservatives' plan to protect aid and the NHS were combined with the more ambitious tightening plan implied by their proposed fiscal targets-
	that sounds like that might be slipping a bit-
	then the cuts in their unprotected areas could be more like 22.8 per cent. or £57.1 billion by 2014-15.
	So I do not understand why anyone is crowing about this amazingly stable settlement, given that it appears that next year we are about to disappear off the edge of a cliff and nobody is prepared to talk about what that actually means for services that have not explicitly been protected. We are talking about 3 per cent. real-terms cuts every year. By not coming clean and giving us an indication about this in a spending report, the Government are taking away from councils time to plan what they need to do and what services they need to prioritise. If councils had more time-if they had had from last summer or even from last October-they would be able to plan their services more effectively and smooth out some of the impact that such cuts will inevitably have on their services. If information is not provided urgently, councils will be preparing their budgets from October and probably having to carry out a slashing exercise on current services of which Freddy Krueger would be proud. All councils will be facing a nightmare on Elm street because they are not being told what to expect.
	What does that mean for council tax payers? It raises a big question as to what will happen to council tax. In the past, there have been above-inflation increases every year since the council tax was introduced, but what impact would the introduction of capping have on services? It would certainly not help to sort out the public debt, because it would provide the Government with only a marginal gain from what happens to council tax benefits, so they would not obtain any advantage. What is most likely to happen is that there will be massive pressures on the council tax system, because if councils want to do anything to prioritise an important service, the only way that they will be able to find any discretion is through terrifying increases in council tax.

Andrew Pelling: The hon. Lady talks about uncertainty. If the Liberal Democrats had leverage over an incoming Government in a hung Parliament -[Interruption.] You have no reason to smile, because that is a possibility. In such a circumstances, what timetable would you have for introducing a local income tax?

Julia Goldsworthy: I will come to that, but the point I am trying to make is that this situation is urgent. Council tax payers will end up with council tax bill increases every year even though services are being reduced-that already occurs, but the extent of it will be more extreme. On the kind of extrapolations that the IFS has produced, there will be massive increases in council tax in return for massive cuts in local services. That will test the local government finance arrangements to breaking point.
	We already have a system of gearing, which means that 75 per cent. of what councils spend is funded through central Government grants. That makes things difficult, but the situation will get harder.

Alan Whitehead: I congratulate the hon. Lady on her relatively numerate presentation, in comparison with what was said by certain people sitting elsewhere in the Chamber. Would she care to speculate on the result for gearing of artificially holding down possible national increases in council tax so that a cumulative additional amount of central Government grant would have to go in to make up the gap and, thus, keep the total stable? As she has suggested, that would increase gearing still further over the years of that increase.

Julia Goldsworthy: I shall be coming to that point later, but basically the Conservative proposals would have the effect of disproportionately benefiting the people in the best position. They would make it more unfair. There are Conservative-run and Conservative-led councils, such as my own, that are unable to deliver the council tax freeze that their national party is asking them to. Those proposals would perpetuate those unfairnesses and could result in the system being even more centralised.

David Heath: I am very worried about one of the two district councils in my constituency, Mendip district council. South Somerset is happily well-run and has shown that it is very good at running its resources. Mendip district council has, over the years, massively cut its services and then massively increased both council tax and charges. It is now considered by the Audit Commission to be one of the worst-run councils in the country. I am not sure that it could survive that sort of impact. The problem is, of course, that the one-time leader of Mendip district council, Councillor Ken Maddock, is now leader of Somerset county council, which has hitherto been a top-rated authority. I am worried not only that Mendip will go down the pan but that Somerset county council will deteriorate.

Julia Goldsworthy: That prompts a question about the motivation of such individuals in wanting to control a council. Is the aim to reduce council tax as much as possible, whatever the cost, or to provide value for money? They are very different things and it seems that the primary motivation is purely headlines rather than providing services in the best interest of local residents.

Andrew Pelling: The hon. Lady was quite right to underline how she is talking about the urgency of reform. She mentioned gearing, and a strong example of that is the London authority, where the gearing is one in 12-the system there is ridiculous. As there is urgency, do you feel that a Liberal Democrat-influenced Government would seek an urgent change to the local government financial system in the first year?

Mr. Speaker: Order. As this is the third time, may I remind the hon. Gentleman that the debate goes through the Chair? I do not feel or think anything on these matters, but I am sure that the hon. Lady does.

Julia Goldsworthy: As I was saying, one of the weaknesses in the current system is the fact that 75 per cent. of what local councils spend is not raised locally. A number of things can be done-some more quickly than others-to try to reverse that ratio. Another weakness in the system is the fact that taxpayers and business rate payers see no correlation between what they pay to their local council and what they end up getting from their local council. Again, when we end up with significant cuts and very difficult decisions, it makes matters even more painful. I know that in the period leading up to my election, I was told increasingly on the doorstep that the current system was unsustainable and that council tax was hated. I think that that problem will be magnified as we go through this process.
	We must not forget, too, that the council tax system is incredibly inefficient. We need only look at the successful application rates for council tax benefit, for example, and at how many people are entitled to it who do not receive it. What will happen in a situation where there might be potentially significant increases in council tax? On top of all that, a range of public services are delivered locally outside local government that might well be subject to similar pressures for which there is no accountability. There is a fundamental question about the other services that are delivered locally outside the local authority. This will lead to the unsuitable state of affairs that we have seen for a long time becoming completely unsustainable. The kind of changes that we need do not simply involve providing longer funding horizons for local authorities, although of course that is helpful. It is not just about getting the funding formula or equalisation measures right or about fully funding any additional responsibilities that central Government pass on to local government. It is about a much bigger issue, for which this situation might provide a catalyst.
	We have a massive disconnect between the people who are accessing public services locally and the organisations that deliver them. Changes need to be more than bureaucratic; they need fundamentally to alter the relationships not just between central and local government but with the people who use those public services. That is why it is depressing when there is an amusing bit of knockabout in the Chamber on familiar issues-revaluation being the obvious one-when the subject is a complete red herring, with people arguing at cross purposes and both sides holding intellectually unsustainable positions. It is not possible to say, We think that the council tax system is great, but we think that revaluation is bad. If we want to keep the council tax system then we must, as my hon. Friend the Member for Somerton and Frome (Mr. Heath) has said, have regular revaluations. That is part of the system. If we do not like revaluations, we must rethink the matter and decide what is the most suitable way of raising taxes locally. It is embarrassing to hear the fake arguments about what is being considered and what is being done. If people really believe that council tax is the right system, they should stand up for the revaluation system.
	In our previous debates on this issue, the most recent of which was on a Conservative Opposition day, the Conservatives have done an absolutely fine job of analysing the problem, but if they think that they will be in a position to run a Government, they need some ideas. Just being able to tell a good story is not enough. Their stance on the council tax freeze is a prime example of how they really do not get it. They are quite happy to talk about localism and to use some of the rhetoric that they think sounds great, but a council tax freeze would mean more centralised funding for local government and less local discretion over the delivery of public services. Their stance on that issue completely contradicts what they say they believe, and is nonsense.
	The Conservatives' proposal on planning is also nonsense. They want to replace central pressures on house building with financial pressures. If one sets that idea in the context of what I said about the IFS Green Budget, we are again talking about massive financial pressures on councils to approve huge developments because that is the only way in which they will get additional income. In my view, housing policy should be based on what the local population needs, not on centrally driven targets or what are basically financial bribes. The priority should be local need, and policy should not be driven by financial incentives or central targets.
	As far as I can work out, the Government's approach to this issue has been displacement activity. There has been a bureaucratic response, but what really needs to be addressed is how people are consulted, how decisions are taken about the delivery of public services and how money is raised. A classic example of the situation is provided in a document published by the Cabinet Office, rather than the Department for Communities and Local Government, which exemplifies the kind of approach that the Government take. I shall be interested to hear from the Minister how effectively she thinks the Smarter Government document and its implementation will help to engage communities on what will be difficult issues. There is a chapter on dealing with local priorities, and page 38 talks about how the Government will improve such relationships. One section states:
	We will align the different sector-specific performance management frameworks across key local agencies-the NHS, police, schools and local government-thereby increasing the focus on indicators relating to joint outcomes. We will set out in Budget 2010 the key areas where frameworks for specific frontline sectors can be further aligned.
	If that is a good example of engaging people, sorting out local government and making it more accessible, and if that is the kind of bureaucratic approach that will be taken, then we have a depressing world to look forward to.
	Another area in which such ideas are being investigated is Total Place. I have a particular interest in this issue because of the many similarities to the Sustainable Communities Act 2007, which I presented as a Bill to Parliament in 2006, following up the excellent work of Sue Doughty, the former MP for Guildford. A key strand of the Act involves the provision of easily digestible local spending reports that contain details of all public spending at local level. The idea behind the reports was that once that information was in the public domain, members of the public would want to have a say in how it could be better spent. It was part of a process to turn decision making around and make it work on a bottom-up, rather than a top-down, basis. The Government have decided, perhaps because that idea did not come from the DCLG, that they do not want to implement it as quickly as the tens of thousands of people who supported that campaign wanted it implemented. However, Total Place provides a way in which that information can be made available in a better way than is being achieved in the local spending reports under the 2007 Act.
	Again, the Government have missed the point. They are making localism a worthy way of having local area agreements with knobs on, but they are not thinking about how to use it as a tool for engaging people, and are not using their expertise to ensure that the right things are prioritised and that money is spent effectively. It is very frustrating that the Government have missed the fundamental point of adopting a localist approach in the first place.
	Instead of inertia and denial about the terrifying future facing a lot of Departments, we need radical action. We need a simplified, localist system of public services that is easier for people to understand and influence. The current difficult financial situation makes that more important, not less.
	The Liberal Democrats have put the localist agenda at front and centre of what we want to do, and that stands in direct contrast to the approach taken by Labour and the Conservatives. The Government's compartmentalised approach spreads across departmental silos, but it is also evident within Departments: today's debate has made it clear that the section of the DCLG that deals with localism and participation does not feel any need to work with the section that deals with local government finance. The localist agenda must cut across both this and other Departments, although I am not convinced that that happens. It is beginning to happen with the Total Place initiative but, unfortunately, as with a lot of things, that is driven by the Treasury.
	We need to encourage more cross-departmental thinking. The localist agenda is important now because some painful, difficult and controversial decisions will have to be taken on the delivery of local public services. Inevitably, they will have an impact on the front line in one way or another. We hear a great deal about how problems can be dealt with by efficiency gains, but that is not so-there will be dramatic cuts.
	The IFS has shown how deep those cuts will have to be if we get a Labour Government after the general election, although a Conservative Government is likely to be even worse. The cuts will be really painful if the current set-up does not change. They will be imposed on communities, without involving or being properly accountable to the people in them.
	The interim findings of the Total Place pilot revealed that councils spend an average of £7,000 per person on public services, of which only £350 is discretionary spending. There are likely to be a huge number of changes over which people will feel that they have no influence or say. It is important that that does not happen.
	We need public services that are designed for, and accountable to, the people who use them, whereas currently we have a system that is designed for the benefit of the organisations involved in delivering them. The emphasis seems to be on administrative convenience, not on the interests of the people who use the services. A fundamental shift needs to happen, and it must cut across a variety of different areas. The tax system must change, so that the taxes that we pay locally no longer disappear into the Treasury to be spent elsewhere. We can achieve that by localising business rates and moving to a system of local income tax, although we would like to allow the councils that are keen to trial that system to pilot it first.
	Money that currently goes to remote and unaccountable organisations could be redirected towards putting local communities in charge of economic regeneration. In addition, the housing revenue account needs to be sorted out, so that councils have greater freedom to borrow and invest in council housing. We also need to give people a proper say on decisions that affect them in other areas.
	The approach that I am outlining would get rid of unaccountable quangos, but it would also have implications for electoral reform. The Prime Minister may have had a deathbed conversion to that yesterday, but he seems to be interested only in the Westminster Parliament. If we are serious about engaging people in politics, we must realise that there are thousands of politicians around the country who are in the same boat as we are.
	People will have their faith and confidence in politics restored if politicians of all kinds go out and prove to them, on their doorsteps, that their vote counts and will make a difference. I was therefore very disappointed that yesterday we saw only baby steps taken for the Westminster Parliament. No such steps were taken at the level of local government, even though some progress in that direction has been made in Scotland. We should remember that the crisis in confidence in politics is not exclusive to Westminster.
	That is the kind of debate that we should be having about the future of local government finance, and of local government more widely. I am disappointed that the Government have not proposed ways to deal with the fiscal crisis that we face and to ensure that people have a say and a stake in the process. The Government continue to assume the worst of local authorities and local people, while presuming that every action taken by central Government is in the best interests of those people and is the best possible outcome, which is certainly not the case. As we go forward into a fiscally tight situation, that is even more important.
	Labour should have come clean on what their proposals will mean for local government, instead of denying that there is any problem with the current set-up. It seems that the Conservatives are intent on cheering them on in that double delusion. We need real change for a fairer, greener and more local system of politics.

Neil Turner: I welcome the settlement. It is an extremely good settlement for local government and builds on more than 10 years of above-inflation grants to local government. It is particularly welcome because the circumstances in which it was first mooted are very different from the present circumstances.
	In the 1980s and 1990s, when the Conservative Government's home-grown recessions were putting pressure on local government, I remember the kind of things that they were doing. It must have been a temptation for my right hon. Friend the Secretary of State to follow their lead, with cuts in money, cuts in the percentage of funding that was given to local authorities, and cuts in the freedom of local authorities to act.
	I was a councillor in the 1980s and 1990s and my local authority, Wigan metropolitan borough council, was losing £8 million to £10 million year on year because of the way in which the Conservative Government dealt with the recession. There was no planning or forward thinking. We got the first indication in November or December and confirmation in February, and we had to start planning our cuts from 1 April. It was a disaster. Cuts were implemented with no thought given to efficiency. It was inexcusable. Programmes were abandoned halfway through because we had been told that we could not have that kind of money. The Government could have done the same this year.

Adrian Bailey: I was chair of finance at Sandwell metropolitan council during those years. I reiterate my hon. Friend's point. After one settlement, we would start planning for the projected round of cuts in the next settlement. That continued for four or five years, and we ended up with large council tax increases combined with a slashing of public services to keep within the Conservative Government's revenue support grant.

Neil Turner: My hon. Friend replicates my account of my own experience, which is shared by many people who were councillors in Labour-controlled authorities, in particular. As was pointed out by my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), who is no longer in her place, the Conservative Government used to gerrymander the system of grants to suit their own local authorities.
	The Secretary of State could have done that, in response to the world recession that we are in, but he did not. Unlike the Eton old boys, we have learned some lessons. We learned not just in the 1980s and 1990s, but in the 1930s, that the way to make sure that we come out of a recession is not through public sector cuts, but by investing in that to slow the recession down and by investing to grow for the future.
	The effect of the present policy, compared with the 1980s, is remarkable. In my borough, we have half the number of job losses that we had in the 1980s and 1990s, half the number of mortgage repossessions, and half the number of businesses going bust. Local government is a major factor in that. Obviously, central Government play a hugely important role, but local government is able to put the funds from central Government into ensuring that people's homes are protected, businesses are supported and jobs are saved.

Andrew Pelling: Would not local authorities be even more effective at economic development if we returned to them what a Conservative Government took away, namely full discretion over business rates? They could then run their cities and towns competitively in order to attract business and prosperity.

Neil Turner: The proposal to return business rates to local government has a lot of merit, but it should not be considered in isolation. If we are to look at how local government is financed, we must do so in the round, rather than through a single issue, as I am sure the hon. Gentleman understands and agrees. However, I take on board his point about the return of the business rate to local government.
	One major thing that we have done over the past few years is introduce the certainty of three years' funding, ensuring that local government is able to forward plan and develop strategic responsibilities. That has been a major element in the improved efficiency of all local authorities. The National Audit Office's figures show that almost every single local authority throughout the country, irrespective of party control, is more efficient and more effective than it was in 1997 at delivering its services. A major aspect of that has been the ability to plan three years on three years, rather than having to go hand to mouth as we did in the past. I do not know where the Opposition stand on that process, but it would be interesting to hear an indication-something that we could hang on to. Will they continue or abandon the three-year process?

Justine Greening: Our concern is that the Government have abandoned the process. There is no comprehensive review and, apparently, no prospect of one. The hon. Gentleman would be better off asking the Minister whether his own Government have abandoned it, rather than asking the Opposition whether we will.

Neil Turner: The Government have not abandoned that process. Clearly, we have a problem with the comprehensive spending review, and we all know that, but it would be nonsensical to undertake a comprehensive spending review immediately before an election that could lead to a change in Government, as it would have been in an economic downturn, which could have been a depression if we had followed the economic advice of the Conservative party. The Government's policy is that the three-year settlement will continue from next year.
	Despite the hon. Lady's intervention, there was no commitment from the Opposition to a three-year spending review or package, but if local government is to plan properly it needs that commitment. If you want to think about the things that local government needs, you really ought to think about that, rather than some of the nonsense that you were coming out with earlier.

Mr. Speaker: Order. May I just gently say to the hon. Gentleman, as I said to the hon. Member for Croydon, Central (Mr. Pelling), that debate is conducted through the Chair? I know that the hon. Member for Wigan (Mr. Turner) did not intend to abuse me with the pejorative language that he just deployed, but it would be good if he avoided a repetition.

Neil Turner: Thank you, Mr. Speaker. Perish the thought that I would ever do anything to earn your wrath and ire.
	I shall provide a couple of examples of what the three-year funding certainty has given us. First, on housing, we have 26,000 council houses in Wigan, and every single one has been brought up to the decent homes standard. We have been able to do so not only in the public sector, but in the private sector, where many thousands of houses have also been brought up to that standard. That is largely due not only to Government money, but to the certainty of being able to plan year on year.
	Secondly, on education, we have been awarded a Building Schools for the Future programme in Wigan. That has now started, and we have a programme to rebuild every secondary school in the borough. I should also mention three primary schools: Canon Sharples, Woodfield and Westfield. For years under the Conservative Government, pupils at Woodfield were taught in timber huts, where in winter they were freezing and in summer they were sweltering. We have totally rebuilt that school under a Labour Government, and shortly we will start on Beech Hill primary school.
	Most importantly of all, throughout the borough we have 19 Sure Start centres. These are not just glorified nursery schools; that is only part of the job that they do. They are also places where parents learn parenting skills. We do not live in a broken Britain-a silly, trite phrase; if one did not know better, one would think it was thought up by some second-rate advertising trainee-but we do live in a Britain where there are people and families who have very difficult problems, and Sure Start is one way of addressing those problems. Mums-many of them are 15, 16 or 17-year-olds-who come from dysfunctional families can go to Sure Start centres and start to learn how to be good parents and how to be communicative beyond their small peer group. They can learn social skills and, equally, the skills that can get them into work once their parenting responsibilities are less onerous.
	Sure Start is absolutely essential to the long-term programme to give children from dysfunctional families, and those families themselves, a better start. They benefit from going from these facilities into much more modern primary schools, and then into modern secondary schools built under this Labour Government's Building Schools for the Future programme, which the Conservatives have not yet said that they would continue with in government; in fact, as I understand it, they would reduce it dramatically, if not scrap it completely. This is a whole package of long-term reform that will reap rewards not only next year but 10, 15 or 20 years down the line. It would be class vandalism for any party to stop or reduce any part of that investment in our people's future.
	We have come a long way, but we could go further. We should implement not just a three-year settlement for local government but a rolling three-year settlement so that every year people will know three years in advance how much money they will be getting. Local government would then be able to plan even more effectively than it does now. I understand that it is not for the Department for Communities and Local Government to make that decision-it needs to be decided throughout Government, and with Treasury agreement. However, it would enhance local government's ability to deliver its services more effectively and efficiently, and there would be benefits to the public good as a result.
	With local area agreements, relaxed targets, Total Place agreements between councils, and health trusts, we have come a huge distance, but we need to go further. The council tax system is inherently unfair. It was designed to be unfair, so producing such a system was one of the few things that John Major managed to succeed in. It surely cannot be right that a millionaire old Etonian in Notting Hill pays only three times more in council tax as a minimum wage earner pays for the same local services. I personally like banding. It is simple to understand and to administer, but we need to reform it. We need more bands at the bottom and more bands at the top-an open-ended banding at the top, I would suggest-so that, as my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) said, the amount of money that is paid more accurately reflects the income of people and their ability to pay for those services.
	Revaluations should be carried out on a regular basis. We should never have cancelled them in the first place-we should have gone on with them at the beginning of this Government and done them again since. As the hon. Member for Falmouth and Camborne (Julia Goldsworthy) said, if we do not do this we will bring the whole system into disrepute; it will become similar to the poll tax in having to be totally reviewed in future. We can do that revaluation-it is not a difficult exercise. Every month building societies tell us by how much house prices have risen or fallen over the period. If they can do that on a monthly basis, I do not see why the Government, via the Valuation Office Agency, could not do it every four or five years. Let me reiterate what my hon. Friend said, because it did not seem to have any impact on the Conservative spokesperson. This is a zero sum game. Having a revaluation does not mean that local authorities will get more money. They may choose to get more money from it, but that is a different issue and a different argument. Some people will pay more, and some will pay less. It is important that there is some kind of damping effect in revaluations so that those who pay more are not suddenly faced with 10, 15 or 20 per cent. increases but they are brought in gradually. It is absolutely essential that we have revaluations if we are to ensure that the system does not fall into disrepute again.
	The final area in which we need reform is the grant itself. The formula is about right, as it recognises deprivation and the needs of councils to tackle the problems that come from that deprivation. It also recognises rurality and the extra costs of delivering services in sparsely populated areas, but it has not been fully implemented. We are still suffering from the disgraceful way in which the previous Conservative Government gerrymandered the grant to their own local authorities. In the years from 2008-09 to 2010-11, Wigan will have been underfunded by £8 million, £6.5 million and £5.5 million respectively-a total of £20 million over those three years.
	There is no doubt that there has been year-on-year improvement, and it has ensured that we are getting closer to the target. We have moved from 6 per cent. below it in 2008 to 4 per cent. below now, but we have to quicken that pace if we are to tackle deprivation properly in areas such as mine. That is all the more important when councils are linked in with primary care trusts. One difficulty is that local authorities and PCTs are now delivering services on a common basis much more. They have common offices, pooled resources and joint funding. When a local authority is underfunded, such as Wigan and many others, the PCT that serves the same area is underfunded. In Wigan, the PCT was underfunded by £26 million in 2008-09, £25.5 million in 2009-10 and £25 million in 2010-11, so £76.5 million that should have gone to Wigan borough for its health services has not. If we want to tackle the health and social inequalities that exist in our country, we must urgently tackle health and local authority funding inequalities.
	There is no doubt that that would cause problems for local authorities that are overfunded. I heard the hon. Member for Richmond Park (Susan Kramer) complain about the funding for Richmond. We hear a lot from the Liberal Democrats about the fact that they believe in equality, yet here we can make an impact in that regard by reducing the amount of money that Richmond gets-it receives more than 200 per cent. more than it is entitled to. We could reduce that and put it into areas such as mine that are underfunded.

Julia Goldsworthy: I think that my hon. Friend's point was that the situation is a bit similar to that of the council tax revaluation. The longer the period over which we try to deal with such issues, the more out of kilter they get. That makes it more painful for areas waiting to get up to their target funding, and more painful for areas that are a long way above their target to get back down to it. Because the problem has not been addressed over a shorter period, it has become even more of a problem to deal with.

Neil Turner: That is not my understanding of what the hon. Member for Richmond Park said-I will read  Hansard. I believe that the hon. Member for Falmouth and Camborne agrees with my point that we need to move more quickly towards the formula funding, so that each local authority gets the grant that it is entitled to under that formula. I welcome that agreement, as it is very important that that happens as quickly as possible. The pace of change is vital to local authorities if we are to achieve things.
	Finally, I welcome the confirmation of the settlement, which I hope will make local authority funding more effective and better in future. The three-year settlement builds on 10 years of growth in funding and allows local authorities to plan. Because of all the things that the Government have done over the past 12 years, local government is in a much better place than in 1997 when we came into power.

Paul Beresford: One of the delightful things about this debate was that the Secretary of State launched it, which is a little unusual. He gave a premier performance. He managed to present figures by using percentages where they were appropriate and actual figures where they were not-it was the performance of a magician, and I look forward to Debbie McGee following it up at the end of the debate to solve the whole thing for us. I suppose, as it has been put to me, I am speaking from a position of poacher turned gamekeeper, or watching from the sidelines. Today's debate has been intriguing. We have wandered round all over the place before eventually coming back to the subject, which I intend to keep to.
	The Minister said that the Government gave a generous cash increase of 4 per cent. to local government. In those broad terms, as a headline, that is correct, but as with all local government announcements, those that gain are silent, with one or two exceptions, such as the hon. Member for Wigan (Mr. Turner), and those that lose complain. In London and the south-east, local authorities have had plenty of opportunity to complain and plenty of reasons to do so. In a way, it is fortunate that they have recognised that we are at the end of the three-year cycle and that they are looking for post-election changes, whoever the Government will be. They have knuckled down to produce savings, to ensure that they provide better services at a lower cost, so they do not hit their local citizens with high charges.
	What has happened under the 4 per cent. increase has varied. The Chairman of the Select Committee touched on this but skidded off it almost immediately. A recent Committee report, The Balance of Power: Central and Local Government, reflected on local government expenditure and local council tax. Successive Ministers, some of whom have attended the debate, would tell us that the ties, targets and bureaucracy for local government have diminished, which they have. However, one must recognise that they have diminished from the enormous high that this Labour Government introduced. There has been a knock-on effect on expenditure and, because of gearing, a massive effect on council tax.
	The cry from local government, which is still valid, is that it wants the bureaucracy, auditing, ties and so forth removed, and local councillors, who have been elected by local people, to be given the opportunity to get on with the job with the minimum of direction from above. The implications of that include considerable savings for both central and local government-an easy example is the Audit Commission, which is five times the size it was in 1997.
	As a response to that reaction by local government, the Local Government Association recently produced a paper that said it could cut the total bill for local government by £4.5 billion, with a positive knock-on effect for central Government. If that were extended to the structure of local government finance, there could be large reductions in council tax, because there is reverse gearing. Gearing was mentioned earlier, but if savings were made in the right sort of areas, there would be reverse gearing, so council tax would go down.
	Perhaps the Government will heed those points. After the election, whoever wins, I hope to have the opportunity to take the new Secretary of State to some local councils-I am thinking in particular of one that my hon. Friend the Member for Putney (Justine Greening) knows. I want to have people explain to him or her in no uncertain terms just how damaging the current Government have been to local government, regarding not financing, but the burdens they have placed on it.
	Of course, the behind-the-scenes selective local government funding cuts have not come up in the debate. As I said, we are at the end of the three-year cycle and there are going to be changes. One problem with a set three-year cycle is that the Government are inflexible. In the current financial situation, it would be risky for them to be too dogmatically tied to a three-year spending cycle. Over the next three years, flexibility will be required.
	Local government claims that its cost inflation is running at approximately 3 per cent. In the light of that, the 4 per cent. is generous, but the distribution, even under this Government-or perhaps particularly under this Government-is slanted. For example, it has not been mentioned tonight, but for most authorities in London the grant increase is only 1.5 per cent. Many of those authorities, especially in inner London, face the sort of dire problems that the hon. Member for Wigan raised. Those authorities are struggling with those problems, although hon. Members have failed to recognise that and, indeed, have criticised the funding for two inner-London authorities, one of which I know quite well. It would benefit those complaining to take a tour of those local authorities to see what has been done with much less money than in other local authorities around the country.
	There will be the threat of capping, but those London authorities will probably look for, and find, efficiency savings so as not to pass excessive costs on to their council tax payers. The same applies in many south-east authorities. My constituency receives services from Mole Valley district council, Guildford council and of course Surrey county council. All are Conservative controlled and all would have been delighted to have received a 4 per cent. increase in grant. In fact, going by trends over many years, they would have been utterly amazed. Guildford's formula grant increased by 1.45 per cent.-not by 4 per cent. This 1.4 per cent. increases Guildford's grant to approximately £62 per head. The average for English district councils is approximately £79 per head. Mole Valley district council would have been delighted with Guildford council's increase, let alone the 4 per cent. Government headline, because it received a 0.5 per cent. Government grant increase. Following the same trend, Surrey county council's grant increase was 1.5 per cent., which follows on last year's 1.75 per cent. and the year before, which was 2 per cent.

Neil Turner: I look at the figures for Mole Valley and I see that it will receive 30 per cent. more than the formula funding says that it should get in 2008-09, dropping to 21 per cent. more next year. How can the hon. Gentleman justify any increase above the floor when the council already receives so much more than it is entitled to? Moreover, half of the super-output areas in Mole Valley are in the top 10 per cent. most affluent in the country.

Paul Beresford: It might help the hon. Gentleman if he took half a day to come with me to some of the Mole Valley villages, which have deprivation to match anything he has in Wigan. In addition, he should think back to when we had an Office of the Deputy Prime Minister and the funding formula changed dramatically. That change reduced the grant to Surrey county council and the local district councils dramatically. The year-on-year loss to Surrey county council was £39 million, and that loss was reflected by the other councils. The hon. Gentleman should reflect on the fact that the money moved with the change in the formula, but that does not mean that the formula is right.
	I accept that there are differences in needs from authority to authority, and that this must be reflected in the allocation. But even the Audit Commission a few years ago commented on the fact that there had been a huge shift of grant from London and the south-east to the north and predominantly-at that stage-Labour authorities. The needs indices calculations are opaque. They are much more unintelligibly dense and complex than pre-1997. Pre-1997, shadow Ministers claimed that they would make the formula more transparent. I note, with some trepidation, that my own Front-Bench team says the same. Of course, it is always a balance. The more transparent and less complex a formula, the more there is rough justice. The fairer the assessment system-taking into account detailed needs-the more complex the formula. However, recent Government formulae have been designed to justify grant movement north despite increasing pressures from population, increased school rolls and increasing Government bureaucratic red tape in London and the south-east. I hope that we will have a new Conservative Government, who will have a massive reorganisation on their hands. It is overdue.

John Howell: I spoke in a similar debate a year ago when we discussed the previous financial settlement. I struggle to see where the massive improvement that the Secretary of State talked about in his opening remarks has come from. Instead, there is greater uncertainty, and the attitude of central Government to local government during this year can be described only in terms of a master-servant relationship. One specific piece of legislation illustrated that fact for me and many other hon. Members when it was in Committee and as it progressed through the House earlier in the year, but I shall come to that later.
	Is the settlement really an attempt, as the Secretary of State made out, to talk up a Labour view of localism? I cannot recognise it as localist, and I do not think that any councillors could either. Overriding everything is the feeling of utter powerlessness of councillors, and that was one of the major reasons many stepped down at the last elections. Many still have that feeling of powerlessness, and nowhere is that more apparent than when it comes to money and their ability to set their own budgets.
	The Secretary of State referred to the importance of this time of the year, not just in relation to this debate, but because of the budget setting that many councils are going through and how the information before us feeds into it. My former colleagues on my own county council remain as frustrated and disappointed as I used to be every budget time because of the little influence they have in setting the budget and allocating money to their own priorities in the area covering a range of different subjects. That is partly a question of ring-fencing, and again the Secretary of State made great play of having improved the business of ring-fencing.
	In preparation for this debate, I asked my local council to give me an idea of the ring-fenced and non-ring-fenced balance amounts. I have an e-mail from the finance and procurement team stating the latest grant figures for 2010-11: a total of £526.2 million, of which £484.8 million is ring-fenced and only £43.2 million is non-ring-fenced. When it comes to councillors being able to use the money and make changes according to their own lists of priorities, even major councils with overall budgets of about £1 billion have just a few tens of millions of pounds at the most. That is not the reason councillors-there are many former councillors in the Chamber-stood for election.

Andrew Pelling: Does it not have a tremendously debilitating effect on both the quality of candidates and on voting, if people do not feel that councillors have real influence in the community or can make a difference? Is it not in many ways a reflection of the pretty poor state of British politics? Does it not in reality underline how the Executive continue to absorb powers whether from Parliament or by abstraction from local discretion?

John Howell: The hon. Gentleman makes some powerful points with which I agree. The Local Government Association has done some survey work showing that a large majority of people think that councillors should have the ability to make financial decisions. If anybody is to cut anything in their own area, they believe that it should be local councillors, who stood for their position, and over whom they have a great deal of democratic control and see regularly. I worry that if we carry on like this, it will be more and more difficult to recruit people to stand for election, because what will be the point of standing for election?
	The challenge of running an authority with a budget of £1 billion is completely frustrated when one gets down to the £20 million that can be distributed. The talent that is out there-the people who would otherwise come in and make a contribution-will simply go elsewhere, including to the golf course. I have nothing against golf, but if I had to choose between recommending that somebody play golf in their retirement and recommending that they be a councillor, I hope that I would be able to persuade them that it was still worth becoming a councillor.
	Ring-fencing has clearly made no impact whatever on the current situation. However, formal ring-fencing is only part of the problem, because even where it has been formally lifted and the funds transferred to the area-based grant-I am thinking of the Supporting People grant-it is still not possible to show genuine localism. Are the Government seriously saying that simply transferring the Supporting People grant to the area-based grant will give councillors the choice between spending on the Supporting People programme and spending on roads? That simply will not happen. In addition to legal ring-fencing, there is therefore also a practical ring-fencing that has happened with many grants, even where they have been shifted.
	We also need to focus again on the need for certainty. There are some examples, which I shall come to, of the Government creating considerable uncertainty about the funding for local councils. However, I do not accept the points made by the hon. Member for Wigan (Mr. Turner) about the reasons why his Government have not pursued a three-year settlement, particularly when the Local Government Association has shown that the funding gap by 2013-14 is likely to be in the region of £11 billion a year. That level of uncertainty is difficult for councils to live with.
	The Secretary of State also boasted of the overall increases in local government funding under this Government's administration. However, if he is going down that line, he has to look at the totality of individual councils' settlements. He can no longer concentrate on only one side of the profit and loss account. If he is going down that line, he has to accept the other side of the profit and loss account: the cost side, and the increases in those costs. Indeed, the percentage of expenditure that is borne by council tax increased from 22 per cent. in 1996-97 to 26 per cent. in 2006-07.
	Councils in my area have experienced a couple of issues that illustrate that point, and one of them is personal care at home. I know that that was covered in the House recently, but there are some specific issues about it, one of which is the cost. It is difficult to know what the cost will be. The Government have produced some airy figures, but it is difficult for councils to assess what the costs of the measure will be to them. First, there would be a loss of income from some of those who currently pay for care arranged by the council. Councils will need to assess what that loss might be, but that is not straightforward. It involves reviewing the detailed circumstances of everyone who currently receives domiciliary care to see whether they would be eligible for free personal care.
	Secondly, some people will have not presented themselves to adult social care, but will decide to come forward if they can obtain care for free. Trying to work out the figures for that is almost an imponderable, but given the experience in Scotland, they are likely to be great. The other aspect of personal care at home is about placing the risk and determining where it lies. Given that the amount of grant proposed for personal care at home in the area-based grant will be fixed, all the financial risk will be put on local authorities if the costs are higher than anticipated. The Association of Directors of Adult Social Services has already made its estimate, which is considerably higher than the original costing in the Budget. There is a review of that in 18 to 24 months, so that could leave significant pressure on councils until any changes are made.
	The council side of that funding is supposed to come out of more efficiency savings. I rather took exception to the Secretary of State's comment that, when councils had shared services and shared their management with the primary care trust or whatever, they could complain about being made to make efficiency savings. My own county council and district council have shared services that are in operation; in fact, I was the person at the county council who put that in. The councils have shared senior management. We share a director of public health with the PCT. My district council has shared management with the neighbouring district council. Both those councils have year after year had robust and aggressive efficiency saving targets, which year after year they have met.
	Perhaps in the winding-up speech the Minister, or if he would like to intervene now, the Secretary of State would like to tell me what I am supposed to tell councils such as my own, which have already gone through the pain of that, registered that pain with their voters, come through and increased their majority at the county council elections. They will feel insulted that they are dismissed in that way and that all that effort and pain was, in his idea of things, for nothing.
	Two other issues arise in respect of pressures on funding. I have no idea how widespread those issues are. I suspect that one is more widespread than the other. One is unaccompanied asylum seeker children. There have been ongoing pressures in that area in Oxfordshire since 2002-03. There was a special circumstances grant of just under £500,000 in 2008 for 2008-09, but it does not reflect the ongoing shortfall, and the current forecast for 2009-10 is for an overspend of £800,000. There is no suggestion that that will be funded by central Government.
	The last illustration of an area that has not been costed is the abolition of the Learning and Skills Council. That will pose a major challenge for directorates in county councils, which will have to reorganise their services to deliver what the Government want. There is not expected to be any additional funding to enable that to happen. There are burdens, too, from the micro-management of partnerships.
	At the evidence session on the Child Poverty Bill, Paul Carter, leader of Kent county council, discussed the big outcomes of the first round of local area agreements. He admitted to having been a sceptic initially, but he was won round by the size of the outcomes. However, he complained bitterly about how the LAA had descended into micro-management and had become far too complex, and with that complexity will come considerable cost.
	There are initiatives that could make a big difference on the cost side. One of them has been mentioned by many hon. Members, and that is Total Place, which is not just about the money that is saved by eliminating duplication. It is also about how services can be reconfigured. I want to stick to the money part of it. There is huge criticism of the way it operates. Again, at the evidence session on the Child Poverty Bill, the leader of Kent county council made it clear:
	There is still a silo mentality across the public agencies, which are acting in isolation and not in concert. If you can get them all working together in a defined area with the totality of their budgets...public agencies will start to deliver things in a fundamentally different way. --[ Official Report, Child Poverty Public Bill Committee, 20 October 2009; c. 53, Q124.]
	However, the biggest culprit as regards participating in an open way with Total Place is the Government, particularly the Department for Work and Pensions. Richard Kemp, the deputy chairman of the Local Government Association, who is a councillor in Liverpool, provided an example. He said:
	In my area, someone from Jobcentre Plus was supposed to be leading the worklessness stream, which is of vital importance in Liverpool. She pulled out because she said that it was not part of her day job, although we were trying to create a partnership to help her do her day job in that case. --[ Official Report, Child Poverty Public Bill Committee, 20 October 2009; c. 63, Q137.]
	The Government really need to look at themselves if they are to establish how they are going to make Total Place work.
	I mentioned the evidence sessions on the Child Poverty Bill because this provides a very good example of the master-servant relationship that we have seen between central and local government this year. I will not detain the House by recapping the Bill, but broadly speaking, the Government set national targets in the first part of the Bill and then handed it all over-just dumped it-on to local government in the second part. They ignored the fact that many councils were already doing a tremendous amount of work, and they imposed a new duty that many people, including those we took evidence from, consistently said was not necessary. They imposed a level of bureaucracy, which must have a significant cost element to it.
	When it came to the impact assessment, however, it showed a minimal cost amount. That is hardly surprising because the meat of the Bill was in the secondary legislation, which had not yet been introduced. How on earth was it possible to make an accurate costing of the effect on local councils and their budgets-in other words, how much would need to come from council tax-if the very secondary legislation was not there, not even in draft form, to enable such an assessment to be made? That is highly illustrative of the Government's approach and attitude towards local government. That is another nail in the coffin for people with talent, interest and enthusiasm coming forward to take part in local government.
	It is time for the Government to play fair with councils and with council tax payers. It is time for some real localism and it is time that we set out to encourage real innovation. It is lying out there among the general public. They need to be brought into local government so that they have a chance to show their innovation, particularly in the delivery of services and particularly in the costing of those services so that they deliver real value for money.

Andrew Pelling: Many of us have confessed our local government experience, and I probably have more to confess in that respect than others, as I was elected to Croydon council in 1982, serving there until 2006, and I also served as a London Assembly Member. If I am allowed to be a little sentimental, I perhaps have an obsessive interest in local government financial settlement systems owing to the fact that my father was a senior civil servant who dealt with these issues in the 1970s, and matters associated with the Layfield report.
	It is fair to say that during the extended period of economic growth, moneys to local authorities were very generous. Indeed, the amount given to local authorities has often been greater than the corresponding overall rate of growth in the UK economy. Nevertheless, it is a bad habit of Government to continue to centralise and to restrict the room for manoeuvre for local authorities, despite the slight row back on the part of Government in recent times.
	I very much feel that the removal of the business rate inflicted substantial damage on the borough of Croydon and greatly undermined the very good work that Lord Bowness did for Croydon council and the town during the 1980s and early 1990s.

Paul Beresford: Speaking as someone from Croydon or for central London, I believe that the removal of the business rate has had a positive side, but it has had a negative effect on much of the rest of the country where there is little business. That is why, in my personal opinion, there must be equalisation across the country; otherwise many local authorities with no or next to no businesses will be savaged.

Andrew Pelling: The hon. Gentleman has demonstrated his long-standing experience of local government, along with a recognition of the inevitability of Government involvement. In my view, while authorities continue to have a degree of discretion equalisation is inevitable. I think that that 1980s Croydon local authority adopted a rather municipalist approach, perhaps a little more independent than the more robust conservatism represented by the hon. Gentleman.
	The former Mayor of London rightly recognised that many suburban areas in outer London faced considerable challenges, and I think that that applies particularly to Croydon. We suffer, or perhaps enjoy, dynamic population changes-what could be described as population churn-while also confronting the challenge posed by the Government's desire to remove a significant number of public sector jobs from the area.
	The Government are right to emphasise the £20 million of extra grant that Croydon will receive this year. There is no good reason why the borough should not be able to match the Labour authorities that are aiming for a zero per cent. increase-or, as that is rather a Brownism, perhaps I should say a freeze-in council tax. Nevertheless, Croydon has fundamental underlying problems.
	I will make only the briefest reference to a regional Select Committee, as another Member was chastised from the Chair in this regard. However, I think it is a positive result of the establishment of regional Select Committees that the London Committee is examining the important issue of the forthcoming census and its impact on local government financial settlements and other public sector flows.
	According to evidence given to the Committee by the London borough of Croydon, its population is likely to be 37,000 greater than the 340,800 that is presumed by the Office for National Statistics and used in local government financial settlement processes. Moreover, 41,034 migrants have registered with GPs in the last seven years, and 25,290 national insurance numbers have been given to non-British workers by Jobcentre Plus over the last three years. Those fundamental problems are undermining the credibility of the moneys given to the borough.
	The operation of the area cost adjustment and the distinction that is made between west and east London-Croydon being regarded as an east London authority-have led to a cumulative shortfall of £16 million. Obviously the operation of the ACA is valuable, but the way in which it is not applied to specific grants has a distorting and unhelpful impact on Croydon's allocations. The difference between the amount given to one authority and the amount given to another can be hard to explain. The London borough of Croydon considers itself to face challenges similar to those faced by the London borough of Enfield-in fact, I think it faces rather more severe challenges-but Enfield receives £423 per head, while Croydon receives £348. That is difficult for the authority to explain to local residents and taxpayers.
	In addition, the authority could face significant pressures as a result of changes in the funding of the freedom pass in London. Given that support for London local government as a whole is to be reduced by £28.6 million, Croydon will lose £1.3 million. Croydon must also spend £1.9 million a year on supporting migrants-or asylum seekers-who, having exhausted the legal system, find themselves with no recourse to public funds. There has been considerable controversy about the decision to close the asylum walk-in centre in Liverpool and to concentrate activities in Croydon. I feel that the Home Office has turned a deaf ear to our concerns, and I have organised a petition on the issue which is securing a great deal of local support.
	I plead for the Department for Communities and Local Government to adopt a more open-minded approach, and to agree that, perhaps over the coming year, it will try to measure the number of additional asylum seekers who are resident in Croydon, in order to see whether the local authority's demand for a better allocation is fair.
	A couple of years ago, a former DCLG Minister, the current Minister for Borders and Immigration, the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), got quite animated with me when I expressed concern about the amount of money that Croydon received, and reference was made to local enterprise growth initiative money. The point was made to me that £77 million of LEGI money came to Croydon, but in reality that money is not guaranteed, and there is a great deal of uncertainty as to whether it will continue to be given. That is an important concern.
	I am also worried about the negative effect on a very weak local economy of the supplementary business rate in terms of all of that money being abstracted from Croydon businesses and being spent entirely on Crossrail. That will have an adverse effect on potential positive investments in the business improvement district in Croydon.
	It is important that Croydon council aspires to achieve the same as some Labour councils in London have achieved: a council tax freeze this year. The incomes of many Croydon residents are either going down or are frozen, and they would find it entirely unaffordable to have yet another increase, especially bearing it in mind that the London Borough of Croydon has increased the council tax by the maximum amount allowed under the informal capping system. I am joined in this call for a council tax freeze by Labour councillors in Croydon, but they have no credibility as they previously increased the council tax by 27 per cent.
	Let me turn now to a matter of great concern, on which I hope the Minister will be able to help. At a time when Croydon council is making real cuts-not merely efficiencies-in services, it has arranged for a loan of £145 million in order to build a new town hall. In addition, there is the prospect of £93 million of interest payments until 2036, making a total of £238 million. Considerable concern has been expressed to me by residents who have received a communication from the Labour party suggesting that the total cost will be £1,115 per household. That is a kind underestimate, as it does not take account of interest payments. The real cost for residents is £2,016 per household.
	I well remember the very important speech given by Neil Kinnock at a Labour party conference about how it was obscene to see Derek Hatton's Liverpool council issuing redundancy notices by taxi. In some ways, I think it is similarly wrong for Croydon council to be setting about cutting services while at the same time putting aside the equivalent of £3.5 million a year to service such a large loan for such a project. Now is not the time to be building a new council headquarters for the benefit of councillors.

Andrew Slaughter: The hon. Gentleman has identified an interesting trend. The proudest boast of the leader of Hammersmith and Fulham council is that he has got rid of 1,000 jobs in the last three years-he has sacked 1,000 people in the middle of a recession-yet that same council is investing £35 million in a new extension to the town hall. These municipal monstrosities are examples of just the sort of grandiose projects of local government that we thought were things of the past, but they are not. This is not only happening in Croydon, therefore.

Andrew Pelling: I am extremely interested to hear that similar projects are being pursued elsewhere in London. It has always been a great weakness of local government and local councillors that they are obsessed with the grandiose, and with aggrandisement at home in the town hall, when it is services that are important. It is wrong that services are being cut back at the same time as such new projects are being taken on. This loan with the Public Works Loan Board is in place, but it has not yet been drawn down. Will the Minister have an opportunity to assess whether this really is appropriate behaviour? I know that our appropriate approach is to say that local authorities should be given discretion to make their own mistakes, but I think that this mistake will fall very heavily on Croydon council tax payers in future, particularly given that the local authority refuses to provide much detail on what the contract involves. It has been taken out in partnership with John Laing plc, which is no longer a public company-it is in the ownership of a private equity fund. Bearing in mind the difficult state in which private equity finds itself in terms of financing from the City, this is a dangerous circumstance for the local authority to have involved itself in.

Bob Spink: The hon. Gentleman may be surprised to learn that the same problem occurred in Castle Point a few years ago under a Conservative Administration. It built what is known locally as the bunker, spending millions of pounds in the process. That has proved to be a very expensive waste, it is much underused and local people are still paying for it.

Andrew Pelling: A worrying trend is being revealed in this debate. It is incumbent on local authorities to be concerned primarily about services, rather than about building new town halls. If Croydon council desires to move location, the best way of doing so would be for it to become a tenant of Stanhope, which has the real desire to start developing on the site next to East Croydon station. No doubt many Members have taken a flight from Gatwick and seen the desolate site next to that station, which gives a bad impression of the town. If the development of that site can begin, that would provide confidence to others to invest in the town. Such an approach from the local authority would have more vision and would have a multiplier effect on investor confidence in Croydon.
	It is also important to stress that local authorities face great dangers in being obsessed with their own party political propaganda. In many ways, I can often see little difference between what is produced by the chief executive's office and by the campaign of the Conservative parliamentary candidate in Croydon, Central. A recent example of that could be seen during the launch of a petition calling for extra police for Croydon. It is extraordinary that the council should be campaigning for extra police given that it has discretion to provide funding for extra police and that it is of the same party as the Mayor of London, who could decide to provide more police to Croydon. Indeed, the local London Assembly member, Steve O'Connell, is also chairman of the finance sub-committee that could decide to provide extra money for police. It is nonsense, and it is an abuse, for Croydon council to be spending money on this matter, given that at the same time as the council launched the petition it was also launched through e-mails from the Conservative parliamentary candidate. It is an inappropriate use of public money to have such a close relationship between a parliamentary campaign and the spending of council money.
	As many Members have said in Westminster Hall debates, there are also great dangers in councils trying to get into the media business. The number of newspapers being produced by councils is unacceptable and risks undermining things. I know that the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter), who takes a great interest in the performance of Hammersmith and Fulham council, has been very critical of the way in which his local authority does that. I believe that the  Your Croydon newspaper wrongly continues to be run so closely with the Conservative parliamentary party campaign and to give great prominence to things during this election purdah period.
	Finally, I wish to return to the issue of the role of business, because the pro-business borough was at the very heart of Croydon's success in the 1960s. I know that, in many ways, the approach taken then had many weaknesses: it was very municipalist and dirigiste, and it was perhaps a little old-fashioned compared with the more appropriately aggressive and laissez-faire approach taken in the London borough of Wandsworth. Nevertheless, co-ordination and co-operation between the council and businesses has an important role to play.
	It is fundamental to note that moneys are taken away through the business rate and the supplementary business rate, but we have no prospect of any of that supplementary business rate being reinvested in Croydon's economy. We need to deal with the significant issue of trying to improve confidence and reduce the fear of crime in the centre of Croydon-a justifiable fear, bearing in mind the number of killings that we have had along the A23 corridor-and of trying to leave some money behind. May I call on the Government-I know that the London Mayor also has some discretion-to try to use their persuasive powers so that some of that money comes back?
	I am very impressed by the campaign that is being run by Max Menon of Allders, the only remaining Allders store in the country. Calling for some discretion and for moneys to be returned to Croydon means that we can defend an exposed and fragile economy that, unfortunately, has not been helped by some real lack of vision from the local authority in Croydon.

Barbara Follett: We have had a most interesting debate that has, at times, ranged far more widely than the 2010-11 local government settlement and over a far wider time frame. The settlement means that every one of the 421 councils in the nine English regions will receive an increase in their formula grant this year, as they have for the past two years.
	The hour is late and I shall confine myself to thanking the right hon. and hon. Members who have made such valuable and interesting contributions to the debate. There have been contributions from the hon. Members for Falmouth and Camborne (Julia Goldsworthy), for Croydon, Central (Mr. Pelling), for Richmond Park (Susan Kramer), for Cities of London and Westminster (Mr. Field) and my hon. Friends the Members for Milton Keynes, South-West (Dr. Starkey) and for Wigan (Mr. Turner), as well as many other hon. Friends who took part in a debate that was, on the Government side of the House at least, extraordinarily well attended. In deference to the injunction from the Chair, I shall not mention the concerns about the dubious mathematical basis of the assertions made by the Conservative Front-Bench spokesperson. However, I think that all Members present welcome the stability offered by this, the first ever three-year settlement. I reassure hon. Members that this Government have every intention of having another three-year settlement. I hope that it will be as fair and as good as this one.
	 Question put and agreed to.
	 Resolved,
	That the Local Government Finance Report (England) 2010-11 (HC 280), which was laid before this House on 20 January, be approved.

Council Tax

Resolved,
	That the draft Council Tax Limitation (Maximum Amounts) (England) Order 2010, which was laid before this House on 20 January, be approved. -(Helen Jones.)

Business without Debate
	  
	Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Electronic Communications

That the draft Electronic Commerce Directive (Hatred against Persons on Religious Grounds or the Grounds of Sexual Orientation) Regulations 2010, which were laid before this House on 5 January, be approved. -(Helen Jones.)
	 Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Mutual Legal Assistance in Criminal Matters between the EU and Japan

That this House takes note of European Union Document No. 17708/09, relating to a proposal for a Council Decision on the conclusion of the Agreement between the European Union and Japan on Mutual Legal Assistance in criminal matters (MLA); and supports the EU Council decision to conclude the Agreement in order to establish a formal international framework for MLA between the EU and Japan which will improve the measures available to combat international and transnational crime. -(Helen Jones.)
	 Question agreed to.

PETITIONS

Malaya (Rosette)

Sandra Gidley: The petition of the citizens of the UK attracts 12 signatures, supported by 4,098 of similar sentiment, 433 of which were collected by  The Southern Daily Echo. The petitioners recognise the award of the naval general service medal and the general service medal with Malaya clasp to approximately 100,000 members of the three armed forces who saw active service in Malaya during the emergency from 16 June 1948 to 31 July 1960. On 31 August 1957, the Government of the UK granted Malaya its independence and after then, to resist incursion by the Indonesian army, Commonwealth troops fought under a defence treaty signed between the Government of Malaysia and the Government of the UK. Those involved in the confrontation were awarded a Borneo clasp by the UK Government and the Pingat Jasa Malaysia by the Government of Malaysia.
	The petition states:
	The Petitioners therefore request that the House of Commons urges the Government to bring forward legislation to award an additional rosette, to be attached to the NGSM/GSM medal ribbon, to all forces who qualify for active service in Malaya between 16th June 1948 and 31st August 1957, in order to distinguish between those who served before Malaya's date of independence and those after; a similar circumstance was recognised by the award of a rosette with the South Atlantic Falklands Medal Ribbon.
	 Following is the full text of the petition:
	 [ The Petition of citizens of the United Kingdom,
	 Declares that they accept the recognition of the award of the NGSM/GSM with clasp M alaya to all members of the three Armed Forces of the Commonwealth, approximately 100,000 in number, a high proportion of them being National Servicemen, serving on active service in Malaya during the emergency from 16th June 1948 to its cessation on 31st of July 1960; on the 31st August 1957 the Government of the United Kingdom granted Malaya its independence.
	 Further declares that the Malaysian Government was formed in 1963 to include Singapore and the States of Sabah and Sarawak on the Island of Borneo; that the amalgamation of the States began a confrontation with the Indonesian Government Army; that to resist the incursion by the Indonesian Army, under the defence treaty signed between the Government of Malaysia and the Government of the United Kingdom, it was necessary to take up arms by the Commonwealth Forces resulting in an agreement being reached in August 1966; and that the Government of the United Kingdom awarded the NGSM/GSM with clasp B orneo and the Government of Malaysia awarded the Pingat Jasa Malaysia (PJM) to all Commonwealth Forces engaged during the confrontation, including all serving members still engaged on active service in Malaya post 31st July 1957, disregarding those forces actively engaged prior to that date.
	 The Petition further declares that those who fought and endured the struggle between 1948 and 1957 do not qualify for any further recognition for their part in the defeat of the Military Army of the Malayan Communist Party.
	 The Petitioners therefore request that the House of Commons urges the Government to bring forward legislation to award an additional rosette, to be attached to the NGSM/GSM medal ribbon, to all forces who qualify for active service in Malaya between 16th June 1948 and 31st August 1957, in order to distinguish between those who served before Malaya' s date of independence and those after; a similar circumstance was recognised by the award of a rosette with the South Atlantic Falklands Medal Ribbon.
	 And the Petitioners remain, etc. ]
	[P000432]

Equitable Life (Ayr, Carrick and Cumnock)

Sandra Osborne: The petition relates to the Government's response to the parliamentary ombudsman's reports on Equitable Life.
	The petition states:
	The Petitioners therefore request that the House of Commons urges the Government to uphold the constitutional standing of the Parliamentary Ombudsman by complying in full with the findings and recommendations of her Report upon Equitable Life.
	 Following is the full text of the petition:
	 [The Petition of residents of Ayr, Carrick and Cumnock ,
	 Declares that the Petitioners either are or they represent or support members, former members or personal representatives of deceased members of the Equitable Life Assurance Society who have suffered maladministration leading to injustice, as found by the Parliamentary Ombudsman in her report upon Equitable Life, ordered by the House of Commons to be printed on 16 July 2008 and bearing reference number HC 815; and further declares that the Petitioners or those whom they represent or support have suffered regulatory failure on the part of the public bodies responsible from the year 1992 onwards, but have not received compensation for the resulting losses and outrage.
	 The Petitioners therefore request that the House of Commons urges the Government to uphold the constitutional standing of the Parliamentary Ombudsman by complying with the findings and recommendations of her Report upon Equitable Life.
	 And  the Petitioners remain, etc. ]
	[P000729]

Destitution Among Asylum Seekers

Fabian Hamilton: I should like to present a petition from Mrs. Patricia Hooker and the Churches Together in Roundhay, in my constituency, which has been signed by 181 of my constituents.
	The petition states:
	The Petition of members of Churches Together in Roundhay,
	Declares that we are deeply concerned about the high levels of destitution among asylum seekers, especially refused asylum seekers, and in particular that many people have been left in this dire situation for prolonged periods. Research in Leeds in 2009, indicates that since the Report in 2007, the situation has deteriorated. It demonstrates that destitution happens at all stages of the asylum process, administrative delays worsen destitution, destitution is serious and prolonged, the number of people being made newly destitute is increasing even with the 'New Asylum Model'-it is not just a 'legacy' problem and entitlement to apply for support does not mean entitlement to receive support. Destitute people may be single or families with children; they are being forced into street homelessness and they have worsening health and mental health problems.
	The Petitioners therefore request the House of Commons to ensure its legislation is designed and implemented so as to end the destitution of asylum seekers at all stages of the asylum process so they can contribute to the United Kingdom and provide for themselves.
	And the Petitioners remain, etc.
	[P000723]

Yemen

Motion made, and Question proposed, That this House do now adjourn. -(Helen Jones.)

Keith Vaz: First, I thank you, Mr. Deputy Speaker, for the opportunity to raise this issue in the House. Yemen used to be perceived as being in the backwaters of the middle east, but recent events have put it under the international spotlight.
	Before I proceed, let me declare my interest in Yemen, which is registered in the Register of Members' Financial Interests. I am also the chairman of the all-party group on Yemen and have a personal interest to declare. I was born in Aden, Yemen, in 1956. My parents had gone there for economic reasons from Mumbai, India, and settled in the then British-occupied south Yemen. I spent the first nine years of my life there, before leaving with my family to escape the mounting conflict. I still feel strongly attached to that beautiful country and I have vivid memories of my early childhood there. I was educated at St. Joseph's convent school, and, as a young child, I used to sit and watch the ships as they prepared to go up the Suez canal.
	The last few weeks have seen some very dramatic events concerning Yemen. International attention has been rapid, and these events continue to unfold on a daily basis.
	I want to thank the Yemeni ambassador to London, His Excellency Mohamed Taha Mustafa, for the role that he and his predecessors have played in ensuring that, despite its size and previous isolation, Yemen is a country that commands the interest of this House and this Government.
	I also want to thank the members of the all-party group-the hon. Members for The Wrekin (Mark Pritchard), for East Worthing and Shoreham (Tim Loughton), and for Rutland and Melton (Alan Duncan), and Lord Lea and Lord Kilclooney-for attending a meeting that I organised only a week ago with Dr. Abu Bakr al-Qirbi, the Foreign Minister of Yemen, prior to the very successful Yemen conference.
	I welcomed the Yemen conference, which took place on 27 January. Our present Prime Minister is the first person in his position to have decided to focus, laser like, on the problems in Yemen and on the country's importance for regional and global security. I also want to thank the Foreign Office and my right hon. Friend the Foreign Secretary for ensuring, before the conference, that we built up relationships with the country. As a result, the conference was very much an end-product of dialogue and assistance that had been going on for some time.
	As I speak in the House tonight, the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Bury, South (Mr. Lewis), is actually in Sana'a. He went there following the conference in order to continue with the relationship that I have described. It is for that reason that the response to this debate will be made by my hon. Friend the Under-Secretary of State for International Development. I think that the Foreign Office looked hard and far for a Minister to answer the debate, but they are spread all over Britain, if not the world. However, I am glad to see my hon. Friend here, as he has had many discussions with me about Yemen, and has done a great deal of work in his Department in respect of international development in the country.
	Only today, and despite his very busy schedule, I and members of the all-party group had a meeting with my right hon. Friend the Prime Minister. We discussed many important issues in connection with Yemen, and I am very grateful for the time that he made available to us.
	On Monday, the Foreign Secretary spoke about the need for deeds, not words. He was right. What we need are practical steps to be taken now, and pledges of aid to Yemen must be delivered immediately. As the Minister knows, we are still waiting for the pledges made at the 2006 Lancaster house conference to be realised. A total of £3 billion was promised by those who came to London to pledge support for Yemen, but only 7 per cent. of that has been paid over so far.
	Yemen is a country of legends, and its history is fascinating. It was rumoured to be the route taken by the three wise men. If that was not the case, it certainly heralded the start of the frankincense trail. The Queen of Sheba had her palace in Yemen.
	As the House knows, Ali Abdullah Saleh was elected President of Yemen at reunification in 1990. I pay tribute to him for all that he has done for his country.
	Yemen is situated at a key position on the Saudi Arabian peninsula. It is strategically placed above the horn of Africa, and lies across the most utilised international shipping route. Its security, and the maintenance of stability there, are of vital interest-not only to Yemen but to all countries, both in the region and internationally.
	Political unrest has caused much trouble for the Yemeni Government since reunification in 1990. It led to the emergence of a separatist movement in the south and the rebellion of a minority sect of Muslims in the north that is now referred to as the Houthi rebellion. The Yemeni Government are addressing the unrest on both sides, while ensuring that unity remains.
	What has concerned us is the recent strengthening of terrorist cells in Yemen. This has meant that the Yemeni Government must additionally face an even more dangerous threat on another front. Terrorists bring the internal risk of disfranchised Yemenis being enticed into terrorist activities to undermine the Government. Effectively, that would rapidly lead to Yemen becoming a failed state- fragmented, drawn into a humanitarian crisis, and encouraging conflict beyond its borders.
	I know that some have described Yemen as a failed state, and I keep reminding Ministers that it is not a failed state. It has the capacity to become a failed state if we fail to support it. As the Minister will know, its commitment to democracy is much better than that of many other countries in the region. However, it is important that in pushing the case for reform, we do so with the Government of Yemen, who are committed to reform. They are aware of the need to reform, and they are aware that unless there are reforms, there will be internal schisms. Tackling corruption and improving co-operation with the Opposition was the first item on the agenda, to be achieved through a commitment to daily dialogue with the Opposition and by the establishment of a national anti-corruption authority.
	As well as political reforms, development and counter-radicalisation in Yemen should be our Government's main focus. Yemen has dwindling oil reserves. It has never had oil reserves like those of Saudi Arabia, for example, and the reserves that it had are dwindling. It has little water and has been deprived of international aid for decades, even after it was severely affected by the repercussions of the first Gulf war.
	America recently pledged £62 million to Yemen, which is up from zero, its previous support. Focusing aid on developing education institutions, infrastructure, employment and export diversification is vital. Counter-radicalisation is intrinsically connected to development and securing long-term jobs. Some 35 per cent. of Yemenis live below the poverty line, 65 per cent. are under 25, and 18 per cent. under 18. Therefore a large, idle and desperate population is being increasingly wooed by al-Qaeda and become increasingly vulnerable to its activities.
	Counter-radicalisation seizes terrorism at the root. The current growth of terrorist networks must be dealt with through immediate action by establishing an effective system of counter-terrorism. This should avoid imposing a military presence or giving such an impression to the Yemenis, especially in light of their previous hostility to American involvement in the region. Providing weapons, equipment and intelligence assistance is the most effective way in which Yemen can combat terrorists within its borders.
	For example, Yemen needs help to develop an effective system of verification. Owing to a lack of helicopters, Yemeni security forces must rely on reports of nearby tribal leaders to confirm those dead or wounded after attacks on terrorist hideouts in the mountains. It is important that if al-Qaeda leaders are killed or prevented from engaging in action, that is independently verified.
	Therefore the creation and development of an efficient system of intelligence and information exchange within the Yemeni security services is extremely important. The US has 550 suspects on the most wanted list, but little is known of their whereabouts and the role in al-Qaeda of each of these suspects. Although this is a difficult starting point, building a system of counter-terrorism for the Yemeni security services will help enormously. That is why it is vital that we have dialogue. Without dialogue, we have real problems.
	We must also keep an eye on the areas beyond Yemen's borders which affect its internal instability through terrorist infiltration. The development of a lawless zone stretching from northern Kenya, Somalia, Eritrea and the Gulf of Aden to Saudi Arabia, is a real fear. We know that extremist groups are already involved in activities in the horn of Africa. We know of the piracy that occurs between Somalia and Yemen. It is extremely important that we provide effective resources for the Yemeni Government to deal with that.
	Some of the security issues can be addressed immediately. Sadly, Yemenia Airways, the national airline of Yemen, has had its flights between London and Yemen cancelled since 20 January. I raised the matter with the Prime Minister today. I understand perfectly the concerns of the Department for Transport. It wants to make sure that when people board flights on Yemenia or from other countries, they are properly searched and scanned before they arrive in the United Kingdom. We heard on Tuesday that at Manchester airport and Heathrow, body scanners are to be rolled out. When we go to through those airports, Members of the House and everyone else will have to go through a full body scanner. If that is the case for this country, surely we can give Yemen one body scanner, so that it can be used at Sana'a airport. The Foreign Secretary talked about a comprehensive approach, but it is important that we look at practical help. We should not wait for reports to be considered by Cabinet Committees; we should act immediately to help those in Yemen who are our friends.
	We also need to look at what is happening within our borders. The President and the Government of Yemen have complained on numerous occasions about the existence on British soil of radio stations that go out of their way to make anti-Yemeni and anti-Government statements calling for the overthrow of the democratically elected Government in Yemen. We must do as much as we can to ensure that our territory-our land-is not used for those purposes.
	Another concern is the British hostages who are held in Yemen. Discussions are ongoing, and I thank the Minister of State, Foreign and Commonwealth Office, the hon. Member for Bury, South, who flew to Yemen yesterday, for inviting me and other members of the all-party group on Yemen to join him on that mission. That was a wonderful gesture in view of the group's work. Unfortunately, owing to other duties, I could not go with him, but he does not need me to accompany him, because he will do a very good job himself.
	We want to ensure that there are practical steps, however, so here is my shopping list, which I have passed on to the Under-Secretary of State for International Development, so that he knows what I am shopping for in today's debate. There should be funding for development and the security services. Let us not wait any longer; let us deliver it now. We are doing our bit, but what about the other countries that pledged £3 billion four years ago? There should also be technical assistance, through the provision of weapons and training, so that we can engage the Yemeni forces and they can stop their country falling into the hands of those who wish to destroy it. There should be more effective intelligence. We have the best intelligence services in the world, so why do we not work with them to provide that help? We should continue to do what the Minister is doing so effectively: providing development aid. What he is doing will benefit people not so much in the short term, although there are immediate benefits, but in the long term. Let us try to get Yemen admitted to the Gulf Co-operation Council. Let us see whether it can be admitted to the Commonwealth, which it is entitled to join, because Aden was a British colony.
	In addition, I put to the Prime Minister an idea, which I hope that he will take up, to create a task force for Yemen, because he himself knows the importance of the matter. The task force should include some parliamentarians, British business men, officials from the Foreign and Commonwealth office and others-anybody who will try to help us keep Yemen stable. It would go hand in hand with the measures that Britain has already undertaken. I do not call for the appointment of an envoy, because that would take too long and what would they do? We have some wonderful Foreign Office Ministers who can do that job, but let us support them by creating a task force for Yemen. Let us not leave the situation as it is; let us do something positive.
	The Government of Yemen are more than willing to co-operate to combat the ills that face their country, and to deal with counter-terrorism. Economic growth, elite compliance and state stability will be welcomed, too, so long as they arrive with a good level of non-interference in Yemen's socio-cultural issues and institutional reform. To quote Dr. al-Kurbi, one of the longest-serving Foreign Ministers in the Gulf, who qualified as a doctor in our country-at Edinburgh university-and therefore knows and has great respect of our country:
	Yemen has many problems, great challenges and more expectations.
	We should assist in tackling those challenges, resolving those problems and ensuring that people's expectations are not in vain. Now that the media frenzy is over, now that the television camera crews have packed their bags and left the Yemen conference and now that the international spotlight has grown a little dimmer, I urge the Minister, despite the huge amount of issues facing Foreign Office and Department for International Development Ministers, to keep our focus on Yemen. We should help them to help themselves. That would be a truly great legacy for this Government as far as foreign policy is concerned-not dealing with this after the event but preventing Yemen from falling into the same kind of disrepair and disillusionment as Afghanistan or Iraq. Because of the respect that Yemenis have for our country, this whole goal-the future of this country-is also in our hands.

Michael Foster: I congratulate my right hon. Friend the Member for Leicester, East (Keith Vaz) on securing this debate and on giving the House an opportunity to have this discussion, and I thank him for his kind words. I know that he has a genuine and long-standing interest in the future of Yemen and its people. That is an interest that the Government share, reaffirmed following my visit to the country last year.
	As my right hon. Friend pointed out, Yemen is a country that is beset by challenges. Fresh water resources are rapidly running out, its population is set to double within the next 20 years, and unemployment already stands at 35 per cent. At the same time, governance is weak, and there is ongoing conflict and political tension. In short, we are talking about a country that has been poor, is poor, and without action will be poor for the foreseeable future. Its development and humanitarian needs are as significant as they are clear to everyone.
	That is why the Department for International Development has long recognised Yemen to be a country desperately in need of international aid and support. We have stepped up our commitment considerably over the past five years; indeed, in 2007 we signed a 10-year development partnership agreement with the country, which was a signal of our intent. As the Foreign Secretary noted in his statement to the House on 5 of January, a renewed UK country strategy for Yemen was developed in September 2009. That set out our priorities and, crucially, made it clear that we are ready to offer our long-term support. The document and the rationale behind it met with agreement from right across this House.
	Since then, of course, Yemen has acquired a much higher profile internationally, with December's attempted bombing making headlines around the world. My right hon. Friend will be aware of the potential role of al-Qaeda and the related terrorist activity in Yemen, which are matters of grave concern to the UK Government. However, let me be clear. Our view, and that of many Foreign Ministers who gathered in London last week, is that such activity is a symptom, albeit a corrosive one, of wider problems within Yemen. To treat that symptom, we need to treat the cause, and that is poverty: poverty of resource, poverty of means, and poverty of opportunity.
	That is why in recent weeks we have moved quickly to see what we could do to encourage the international community in its support for Yemen. The Foreign Ministers' meeting in London last week, convened by the Prime Minister and attended by Yemeni Prime Minister Mujawar, had three main objectives: first, to forge an international consensus about the nature of the challenges that face Yemen; secondly, to build an impetus behind the economic and governance reform agenda; and thirdly, to improve the way that we co-ordinate international aid that goes to Yemen.
	In his statement to the House earlier this week, the Foreign Secretary outlined what had been agreed at that meeting. I can reiterate today that everybody present agreed that the main responsibility for tackling Yemen's problems lies with Yemen itself. However, the international community is ready to stand by Yemen and to offer its support, both in addressing the challenges presented by al-Qaeda, including through enforcing all relevant United Nations sanctions, and in helping the Government to tackle the political, social, governance and economic challenges that they face.
	The agenda is both short term and long term. Short-term support will be provided through a new Friends of Yemen Group, which will act as a kind of critical friend, ready to challenge, question and advise the Yemeni Government. This will be particularly important as Yemen faces up to some tough decisions on how and where it should focus its energies. The first meeting of that group will take place in the Gulf in late March, and it will discuss how Yemen can best deliver much-needed economic and governance reforms and tackle the challenges and instability that it faces.
	During the London meeting, the Yemeni Government and the International Monetary Fund reaffirmed their agreement to talks to establish an IMF programme for Yemen. That is extremely encouraging and should help Yemen identify ways to tackle some of the most immediate economic problems, including the burden placed on its budget by national fuel subsidies and the civil service wage bill. If that process is successful, it should encourage other donors to align their funding accordingly, potentially making funding streams more effective.

Keith Vaz: I thank my hon. Friend for what he has said so far, but I still cannot understand how, after the conference that we hosted at Lancaster house in November 2006-a wonderful decision by the Government, and we have always hosted such conferences-£3 billion was pledged but only 7 per cent. has been paid. What has happened to the other 93 per cent.? Who is not paying?

Michael Foster: I hope to come to that point, and indeed I turn now to the very subject of aid. The secretary-general of the Gulf Co-operation Council has called a meeting of donors to discuss the barriers to disbursing aid in Yemen. Securing progress by the Government of Yemen on key economic and government reforms is critical to that, as is the capacity of the Government to absorb funds. The GCC meeting is specifically intended to identify barriers to the disbursement of Gulf donor funds.
	As my right hon. Friend acknowledged, disbursement has been limited ever since the 2006 London consultative group meeting, at which some $5 billion of support was pledged. That money, together with funding from other donors, will help Yemen diversify its economy. That is particularly crucial given that its oil reserves, which represent some 90 per cent. of the country's export revenue, are expected to run out within the next 10 years.
	In the short term, the Yemeni Government need support in delivering basic services and providing jobs for their people, and we can help on that. However, they themselves need to take the critical decisions that will reverse Yemen's trajectory by delivering services, stabilising the economy, tackling terrorist activity and resolving conflict. They need the political will to do that. I know that the challenge is immense, but it must be co-ordinated if we are to stand a chance of success.
	Long-term support for Yemen is also needed to help it develop new markets, invest in its future and create job opportunities. However, economic growth will also depend in part on Yemen's ability to resolve conflict and strengthen its governance, including by tackling corruption. Conflict can disrupt internal trade and discourage investment. Indeed, the evidence that we have suggests that it can reduce a country's growth by more than 2 per cent.
	We do not want Yemen to fail. Its problems are complex and will be addressed only through concerted and sustained effort on the part of the international community and, most importantly, on the part of Yemen itself.

Keith Vaz: Obviously my hon. Friend was not at the meeting with the Prime Minister, because I know he has his own engagements. Will he consider the idea of a taskforce on Yemen, which would deal not only with Government-to-Government contact but with people-to-people contact? There are many Yemenis in this country. As he knows, I am not a Yemeni-I am of Indian origin, although I was born in Yemen. However, there are many Yemenis in places such as Cardiff, the Foreign Secretary's constituency of South Shields and elsewhere. It will be helpful if we can provide something more than just Government-to-Government contact, especially as far as trade and industry are concerned.

Michael Foster: I accept totally what my right hon. Friend says about the contacts that exist in the UK and our good will towards Yemen. I will consider his suggestion and also offer him opportunities to raise it with others in the very near future.
	Yemen has many friends beyond the UK, including the United States, the European Union and the GCC. Together with those partners, we stand ready to help Yemen and its people. Activity in recent weeks is testament to that. We need now to maintain that momentum so that reform can be achieved, aid unlocked and a future secured.
	I repeat my thanks to my right hon. Friend for raising this important topic. We have plans in place to provide Members with a more detailed briefing on our work in Yemen, and I will ensure that he is notified of the time and date of that meeting.
	 Question put and agreed to.
	 House adjourned.

Deferred Divisions

EU Enlargement strategy

That this House takes note of European Union Document No. 14513/09, Commission Communication on Enlargement Strategy and Main Challenges 2009-10; and supports the Government's policy that Turkey, Croatia, Iceland and all the countries of the Western Balkans should be able to join the EU when they meet the criteria.
	 The House divided: Ayes 403, Noes 20.

Question accordingly agreed to.

Infrastructure Planning

That the draft Infrastructure Planning (Decisions) Regulations 2010, which were laid before this House on 5 January, be approved.
	 The House divided: Ayes 231, Noes 196.

Question accordingly agreed to.

Financial management

That this House takes note of an unnumbered explanatory memorandum from HM Treasury dated 2 December 2009 on the European Court of Auditors' 2008 Annual Report, an unnumbered Explanatory Memorandum from the Department for International Development dated 3 December 2009 on the European Court of Auditors Annual Report on the activities funded by the seventh, eighth, ninth and tenth European Development Funds, concerning the financial year 2008, European Union Document No. 12139/09 and Addenda 1 and 2 on the Protection of the financial interests of the Communities, and unnumbered Explanatory Memorandum from HM Treasury dated 18 August 2009 on the European Anti-Fraud Office's ninth activity report for the period 1 January to 31 December 2008, European Union Document No. 12668/09 and Addendum 1, Commission Report on the Annual report to the discharge authority on internal audits carried out in 2008, European Union Document No. 14998/09 and Addendum 1, a Commission Report to the European Parliament on the follow-up to 2007 Discharge Decisions (Summary)-European Parliament Resolutions, European Union Document No. 16632/09, European Court of Auditors Special Report on delegating implementing tasks to executive agencies, European Union Document No. 17588/09, Commission Report to the Council on the follow-up to 2007 Discharge Decisions (Summary)-Council recommendations; and supports the Government's promotion of measures to improve the level of assurance given on the Community budget.
	 The House divided: Ayes 230, Noes 202.

Question accordingly agreed to.